Capitol Watch: Budget Hearings To Start Amid Medicaid Woes

January 8, 2020 - Albany, NY - Governor Andrew M. Cuomo delivers his 2020 State of the State Address in Albany. (Mike Groll/Office of Governor Andrew M. Cuomo)

ALBANY — Public negotiations over New York’s budget are set to begin amid worries about another round of Medicaid cuts.

Heads of state agencies, lobbyists and members of the public will start to offer input on the governor’s proposed budget Monday, kicking off three weeks of budget hearings. Gov. Andrew Cuomo’s $178 billion proposed spending plan would increase state spending by 1.9%.

The governor says even with plans to reign in Medicaid spending, New York will spend $20 billion of state funds on Medicaid in the fiscal year starting April 1. That’s a 3% — or $573 million increase — from the previous year.

But lawmakers are likely to focus much of their attention this spring on avoiding harmful cuts to Medicaid, the government health care program for people with low incomes, which serves one out of three New Yorkers. Cuomo’s administration hopes to help plug a $6 billion budget gap with $600 million in Medicaid cuts to nursing homes, hospitals and other healthcare providers.

And New Yorkers could see deeper cuts in Medicaid this year if lawmakers fail to find $2.5 billion in savings that don’t harm beneficiaries or local governments in the state budget due by April 1.

“So yes, he (Cuomo) has this aspirational goal: ‘Get it done without harming anyone,’” Democratic Sen. Liz Krueger, chair of the Senate Finance committee, said. “But if you can’t, then we’re cutting. And that kind of thing scares me.”

Krueger said she’s concerned about cuts for children’s health insurance and a fund serving families with children with severe disabilities likely caused by medical malpractice.

Lara Kassel, coordinator of Medicaid Matters New York, which advocates for recipients, said she worries the pressing deadline will trigger harmful across-the-board Medicaid cuts.

“They typically hit community-based providers that serve historically underserved communities much harder than bigger facilities that can sustain the hit,” she said.

Andy Weyant, of Monroe, lives with quadriplegia and hires his own personal care assistants through a Medicaid program that allows him to run his personal finance company. Weyant said he knows there may be too many bureaucratic agencies in the growing program, but said he worries big cuts could make it even harder to find and retain personal assistants who make the state’s $11.80 minimum wage.

“It’s ridiculous,” he said. “Why has (the state) not paid attention to this and let it get that out of control?”

Flushing resident Lisette Tomko works as a personal assistant for her 95-year-old mother living with Parkinson’s and dementia. She said her mother was neglected at a nursing home, and that she’s able to monitor her and provide care at home at a much lower cost.

“I get they have to make cuts,” Tomko said “You also have to look at the whole picture. I take care of my mom not because I’m getting a paycheck. I did it for free for eight years.”

Still, Krueger said she has seen larger budget deficits. She said higher-than-expected tax revenues this year could help address the deficit as the economy grows.

“We’re up, a lot more than we thought we would be,” she said.

The governor says the state will leave the details of trimming and restructuring the nation’s largest Medicaid program to a yet-to-be-announced team of healthcare officials, insurers and lawmakers. Insurers afraid of private insurance tax hikes are already arguing for cuts in payments to hospitals, while personal aide programs are calling for fewer state-mandated assessments to save money.

The idea for a panel hearkens back to 2011, when the Democrat faced a $10 billion deficit and launched a 32-member Medicaid Redesign Team. Their cost-cutting recommendations were worth $2.3 billion in the 2012 fiscal year.

“After the (team’s) first convening in 2011, Medicaid spending went from double-digit growth to half the national average — under 3 percent -— for five years,” New York State Division of the Budget spokesman Freeman Klopott said.

Lawmakers and healthcare leaders are now asking Cuomo’s administration if they can join the team, which Cuomo says will release recommendations ahead of the April 1 deadline. Past member Kassel said the new team must represent consumers and advocates.

It’s unclear how many individuals will serve on the team, and when and how they’ll meet. Cuomo spokesman Jason Conwall said the administration will soon publicly release details about the team, which will again be led by Northwell Health President and CEO Michael Dowling and former SEIU 1199 President Dennis Rivera.

Krueger said she’s concerned about potential conflicts of interest among team members.

“If you’re running the largest hospital system in the state, are you really going to objectively come up with answers including the possibility of reducing payments to your own system?” she said. “I’ve got my doubts.”

The team could also include health industry groups that are donating to state political parties. The Greater New York Hospital Association, which represents hospitals and other health care systems, has donated at least $275,000 to legislative Democrats and Senate Republicans since mid-July, according to state campaign finance filings. The group has given $2.1 million to the state Democratic party and Democratic legislative committees since 2018 and $580,000 to Republican committees.

Team members could examine the success of past Medicaid reforms — including a push toward managed care and a cap on annual increases in state Medicaid spending. Soaring managed long-term care costs and Cuomo’s $15 minimum wage hike are helping drive Medicaid spending above the limit, and Democratic Senate Leader Andrea-Stewart Cousins has said issues including the cap “are worth revisiting.”

Another solution could involve looking at how government decides who is eligible for Medicaid services. New York is one of a few states that requires counties to chip in for Medicaid costs. Cuomo has questioned local governments’ role in Medicaid decisions as the state takes on more costs.

Krueger, who’s calling for increased transparency in the state’s Medicaid spending, said an increasingly older population is simply signing up for Medicaid benefits more often.

“We set out to get them to sign up. They did. Now we have a reality of far more people on Medicaid and we have to pay the costs,” Krueger said.

The Manhattan Democrat said she’ll watch how much the state balances the budget on New York City’s back in particular. Cuomo’s proposing to penalize counties who exceed a 3% limit on Medicaid cost increases.

Several liberal groups want lawmakers to raise taxes on the wealthy to right the budget, an idea that’s drawn some support from Democratic Assembly Speaker Carl Heastie, hesitation from Stewart-Cousins and opposition from Cuomo.

But Fiscal Policy Institute analyst Jonas Shaende said lawmakers in a budget crunch could consider tax hikes.


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