March 2005


From the NYS Assembly · Sheldon Silver, Speaker
Richard N. Gottfried · Chair, Health Committee
Steve Englebright · Chair, Aging Committee
What the experts are saying about the governor’s budget

"These nursing home cuts would be disastrous to residents and their families. The sheer trauma that Central New York’s elderly and disabled will be forced to go through, especially the prospect of their nursing home closing, is disgraceful. New York should be helping our seniors, not hurting them."

- Jennifer Cunningham, Executive Vice President, 1199 SEIU

"...[T]he Medicaid cuts, provider taxes, and changes to public programs for the uninsured that are contained in the Executive Budget will, if enacted, destroy New York’s health care system."

- Kenneth E. Raske, President, Greater New York Hospital Association

"If enacted, this budget will devastate the health care system. The proposed taxes and cuts will lead to reduced access to care, layoffs, and elimination of services. Moreover, it will depress the morale of an already stressed health care workforce and will hurt local economies.quot;

- Daniel Sisto, President, Healthcare Association of New York State

"Make no mistake about it - the [governor’s] proposed 2005-06 budget is not a blueprint for meaningful continuing care system reform. To the contrary, it is a decided step backwards on the path to reform, and a prescription for further unraveling of the system."

- Carl S. Young, President, New York Association of Homes and Services for the Aging

"These cuts will have a detrimental effect on an industry still reeling from decades of cuts and operating in an environment that continues to worsen."

- Phyllis Wang, President, New York State Association of Health Care Providers

"We applaud the Assembly’s rejection of many of the governor’s draconian cuts in health care and human services."

- Mark Dunlea, Associate Director, Hunger Action Network of New York State

Assembly rejects bulk of governor’s health care cuts and taxes
Assembly resolution also caps local Medicaid burden

The Assembly passed a budget resolution that rejects $871.6 million of Governor Pataki’s Medicaid cuts and taxes on hospitals and nursing homes, including a 0.7 percent "sick tax" on hospitals and cuts in Family Health Plus coverage (Resolution C322).

Make no mistake about it. When the governor talks about Medicaid "reform," he’s talking about cuts - cuts that deny health care to those who need it most. An example of what the governor calls "reform" is his proposal to cut Family Health Plus to the bone and then offer local governments a state takeover of what’s left. He does this after spending millions of taxpayer dollars promoting Family Health Plus - and himself - in glitzy TV commercials.

About 70 cents of every Medicaid dollar goes to care for the elderly and disabled, and a significant portion of New York’s health care system relies on Medicaid funding. When a hospital, nursing home or home health care agency absorbs cuts, staff gets cut and services suffer - leading to poorer quality care for all of us.

Medicaid is a growing burden on local taxpayers, so the Assembly proposes a complete cap on the local share of Medicaid spending growth. To provide more relief, the Assembly supports speeding up the full state takeover of Family Health Plus starting on October 1, 2005 for counties outside New York City. Together, these initiatives will save an estimated $1 billion in 2006.

Restoring cuts to health care providers

The Assembly’s proposal extends the Health Care Reform Act (HCRA) through June 30, 2007, continues Workforce Recruitment and Retention funding, and extends Child Health Plus and the rural health program. Other health-related restorations in the Assembly budget include:

  • $14.2 million for the Commission on Quality Care for the Mentally Disabled

  • $10.4 million for public health programs, which serve as the frontline defense against bioterrorism and outbreaks of disease

  • $3.1 million for alcohol and substance abuse prevention programs in New York City schools

  • $2.1 million for mental health services

  • nearly $1.7 million in funding for Office of Advocate for Persons with Disabilities

The resolution also supports $10 million more for pregnancy prevention over last year.

The Assembly’s budget resolution provides $10.5 million for community-based programs that help the elderly remain in their homes - thereby avoiding more costly institutional placements. It also extends the Naturally Occurring Retirement Community Program for two years.

Restructuring and re-evaluating New York’s health care system

The Assembly restores many of the governor’s health cuts, but we must also restructure the system to ensure its affordability and effectiveness in providing quality care, both in the short term and for future generations. We must work across partisan lines to find solutions that will improve health care in all regions of our state and meet workforce needs.

The Assembly proposes a broad-based, bipartisan commission to examine the capacity of the health care system; determine where savings can be achieved; consider regional needs and input; develop criteria to evaluate the health care delivery system; and create a plan for ensuring the state can meet the needs of New York’s residents.

The Assembly plan offers a comprehensive blueprint to do this - funding HEAL NY, a program that will make $1 billion available for capital improvements for hospitals and other health care providers, including new technology, over the next four years.

Creating the New York Medicaid Institute

Real reform - that ensures the cost-effective delivery of quality services - requires decisions that are based on up-to-date information and knowledge of current best practices. The Assembly proposes creating the New York Medicaid Institute to provide independent professional research and analysis for effective Medicaid reform.

Managing high cost cases

A significant portion of Medicaid costs are incurred by a small percentage of cases consisting primarily of persons with chronic conditions and disabilities. The Assembly proposes exploring ways to reduce costs associated with these cases, while providing better managed and more effective care, through expanding disease management demonstration programs, and Medicaid managed care demonstration programs; and supporting Managed Long Term Care (MLTC) and Programs of All-inclusive Care for the Elderly (PACE).

Controlling prescription drug costs

Prescription drugs are the least-controlled and fastest-growing component of Medicaid spending. To save money on prescription costs, the Assembly supports a Preferred Drug Program (PDP) with consumer safeguards and protections that would allow physicians to make final decisions on medication - not bureaucrats.

In addition, the Assembly directs the governor to seek prescription drug savings through the federal 340B Discount Drug Program - a move that will bring significant savings to New York. The Assembly also believes the Department of Health needs to more aggressively pursue tens-of-millions-of-dollars in rebates that are owed to the state’s Medicaid program from pharmaceutical manufacturers.

Simplifying Medicaid, FHP and CHP recertification

As many as 50 to 60 percent of those eligible for Medicaid, Family Health Plus and Child Health Plus are needlessly churned in and out of coverage because of complex application and documentation requirements. By simplifying the recertification process, the state can reduce administration costs associated with re-enrolling and recertifying people - and make sure they get the health care they need.

Encouraging employer partnerships

To help employers provide coverage for low-income employees, the Assembly proposes a premium assistance initiative that would stretch public dollars by paying the employee’s share of the premium charged by the employer’s health plan for individuals who would otherwise sign up for Medicaid, FHP and CHP.

Reforming HCRA

The Assembly continues to support moving HCRA spending "on-budget" to keep the public up-to-date with accurate information about this spending. The Assembly also empowers the State Comptroller to audit HCRA spending.

As we look to the future, we must make sure that our health care system will be able to meet New York’s diverse needs. Our plan to re-evaluate and restructure it will do just that. The Assembly needs the governor and Senate to join us in making this a priority.

To see the Mediciad Cap Run, please click here.

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