screen-shot-2017-01-10-at-4-20-49-pm-300x190-4647850Although called “extenders,” the temporary budget bills that were speeding through the Legislature on Monday go beyond a simple continuation of the status quo, especially in the area of healthcare.

Among a laundry list of policy changes, the two bills establish a “cap” on Medicaid drug spending and expand Medicaid benefits to cover certain infertility treatments as well as bottled human breast milk for newborns.

The bills also appropriate $2.5 billion for drinking water infrastructure projects, but do not fully specify where that money will be found or how it will be allocated.

In addition, Monday’s budget bills included the single biggest revenue action the Legislature is likely to take this year: extending the state’s Health Care Reform Act.

Continuing HCRA’s taxes on health insurance through 2020 will bring in $13.3 billion over the next three years. Extending the much-debated income tax surcharge on millionaires, by contrast, will raise a projected $12.6 billion.

The two temporary budget bills – totaling more than 1,700 pages – were introduced by Governor Cuomo on Monday as a stopgap after he and the Legislature failed to agree on a budget before the start of the new fiscal year on Saturday. The package was meant to keep state government operating through May 31.

The Senate quickly passed the measures by a pair of 46-15 votes. The Assembly was due to take them up Monday evening passed them by votes of 107-35 and 105-37.

The cap on Medicaid drug spending appears to be a watered-down version of an initiative proposed by Cuomo in January.

The original plan empowered the Health Department to set benchmark prices for certain expensive drugs. Manufacturers who charged more than the benchmark would have had to rebate 100 percent of the excess to rebate, or pay a 60 percent surcharge on sales to the private sector.

The plan introduced by Cuomo on Monday – which mirrors an alternative in the Senate Republicans’ one-house budget proposal – empowers DOH to negotiate supplemental rebates on high-priced drugs, and to impose a target rebate and other sanctions if manufacturers don’t come to terms. However, the department can invoke those powers only if overall Medicaid drug spending exceeds a certain growth rate in the next two fiscal years.

Adding bottled human breast milk as a benefit under Medicaid also reflected a proposal in the Assembly Democrats’ Senate Republicans’ one-house budget.

Adding Medicaid coverage for “ovulation enhancing drugs,” a treatment for infertility, appeared to be a new proposal. It was not mentioned in either of the two houses’ one-house budgets or in the governor’s earlier spending plans. State law has required private health plans to cover infertility drugs since 2002.

Update: The Senate GOP budget called for Medicaid to cover “infertility services” in line with the mandate on private insurance. The provision about ovulation enhancing drugs appears to be a modified version of that proposal.

Correction: As noted above, the provision calling for Medicaid to cover donated breast milk originated in the Senate Republicans’ one-house budget proposal, not the Assembly Democrats’.


About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

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