Albany Update Volume 5 - February 25, 2005 Health and Medicaid Year Ahead Overview Medicaid Proposals Governor Pataki's SFY 2005-2006 budget proposal for health care and Medicaid are premised on two linked proposals: Medicaid cost containment and reduction in local governments costs from Medicaid. Legislative staff estimate that the cost containment initiatives proposed by the Governor would reduce payments to health care providers by approximately $2.1 billion and reduce benefits to beneficiaries by approximately $850 million. Additionally, the Governor proposes capping the growth in the local governments' share of Medicaid at 3.5% in 2006 and tightening this cap annually until full state takeover of the costs of Medicaid occurs in 2008. However, the Governor would require cost containment to be enacted as a condition of this takeover of local costs. Health Care Reform The Governor proposed extending the Health Care Reform Act (HCRA) from June 30, 2005 until June 30, 2007, with few changes to the HCRA system. However, the Governor also proposed two additional pieces of legislation that would: 1) establish a bi-partisan commission to immediately develop a list of hospitals and nursing homes that would be closed; and, 2) establish a $1 billion bonding program to finance health care system restructuring and information technology over four years. Included in the Governor's proposal is the assumption that there would be an additional $400 million available from the conversion of not-for-profit health insurers. The Governor also sought authority to apply for waivers from the federal government to restructure funding for health care services in New York State. The Year Ahead It is expected that the proposed Medicaid cuts will be vigorously opposed by the hospital and nursing home industry and the health care workers union. County government leaders have been actively seeking state takeover of local Medicaid costs. However, several prominent local government leaders have already expressed concern about the impact of the Governor's proposed cuts on the health care system. Additionally, an expected decision from the NYS Court of Appeals on a lawsuit challenging the conversion of Empire Blue Cross from a not-for-profit entity to a for-profit insurer could have a significant impact on the health/Medicaid budget. Previous budgets have assumed $1.8 billion in revenue from the Empire conversion. However, pending the resolution of the court case, none of the money has been transferred to the state. Furthermore, resolution of the court case could expedite efforts by another not-for-profit insure -- HIP -- to convert. These conversions could result in billions of additional dollars available for funding health care programs. Upcoming Fundraisers Monday, February 7th Senator Byron Brown [D] - Albany, $300 Senator Hugh Farley [R] - Majority Whip - Albany, $300 Senator Serphin Maltese [R] - Cities - Albany, $350 Senator Carl Marcellino [R] - Chair, Environmental Conservation - Albany, $350 Senator George Maziarz [R] - Chair, Labor - Albany, $350 Senator George Onorato [D] - Vice Chair, Minority - Albany, $250 Senator Mary Lou Rath [R] - Tourism -Albany, $300 Senator Valesky [D] - Albany, $250 Republican Assem Camp Comm - Albany, $500 Thursday, February 10th Senator Dale Volker [R] - Chair, Codes - Depew, $150 Monday, February 14th NYS Sen Rep Sen Bonacic, Sen Stachowski, Assem W. Barclay, Assem Luis Diaz, Assem Peter Rivera, Majority Leader Sheldon Silver If you have any questions about fundraisers, please call Sandy in the Albany office, 518 462-4620. Back to newsletter list

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