Federal Medicaid Boost for New York State Considered ‘Iffy’

The largest source of revenue for the estimated $3.5 billion health care package passed yesterday by New York lawmakers -- an increase in the federal matching rate for the state's Medicaid program -- is "considered iffy even by some backers," the New York Daily News reports. The multiyear plan, passed Jan. 16 by the state Legislature without any public hearings, relies on an additional $1.8 million in federal Medicaid funds that would come from a 3% increase in the federal matching rate, from 50% to 53%. "We believe, based on our conversations with the federal government and the work of our congressional delegation, that we will receive additional federal funding," Robert Hinckley, health care adviser to Gov. George Pataki (R), said. But Sen. Hillary Clinton (D-N.Y.), a "leader in the fight for the Medicaid increase, acknowledged" that garnering approval on Capitol Hill will be an "uphill battle," the Daily News reports (Mahoney, New York Daily News, 1/17). Elizabeth Lynam of the Citizens Budget Commission, a New York City government watchdog group, added, "It's ... certainly something that has been on the agenda before that the state has not been able to get done in Washington."

'Soundly Balanced'
Pataki defended the health package yesterday, saying that it should be viewed as a "multiyear plan that will be balanced over a number of years," the Rochester Democrat & Chronicle reports. "I have no doubt that [it] is very soundly balanced," he said. A 39-cent increase in the state's cigarette tax will provide about $800 million to pay for the package, while about $950 million will come from a one-time payment the state will receive from Empire Blue Cross and Blue Shield's conversion to a for-profit company (Rosenberg, Rochester Democrat & Chronicle, 1/17).

Details Still Emerging
Many lawmakers have continued to criticize the process that led to the bill's passage. "[A]lmost none" of the legislators had seen the full bill before filing into the Assembly and Senate chambers early yesterday morning to vote, as the final negotiations were conducted mainly by Pataki, legislative leaders and Dennis Rivera, president of a New York City hospital workers union, 1199/SEIUA New York Times "Political Memo" reports that the "full meaning" of the package was "still emerging" yesterday. For example, while lawmakers were assured that a 6% tax on nursing home bills imposed to raise $300 million a year would not actually raise costs for patients because it would be covered through federal Medicaid reimbursements, the tax "also applies equally to the bills of nursing home patients who are not on Medicaid." Some lawmakers said the higher bills could run to more than $100 million a year. The health package also uses the one-time payment from the Empire conversion to "pay for expenses that will continue long after that money is gone," the Times reports. "Had this thing been thoroughly aired over two or three months, there would have been a better understanding of the kind of awful fiscal gimmickry behind it," Assembly member William Parment (D), who opposed the bill, said, adding, "The critics would have weighed in, the Wall Street firms would have weighed in, and maybe it would have been made better" (Perez-Pena, New York Times, 1/17).