NY budget battle: Hochul proposed $10B for NY health care. Legislators want a lot more [The Buffalo News, N.Y.]

Mar. 23—Gov. Kathy Hochul's budget proposal touted a $10 billion, multiyear plan to bolster New York's pandemic-battered health care industry, calling it "the largest investment in health care in state history."

State legislators want to spend even more.

In releasing their one-house budget proposals this month, the Assembly and Senate plan major spending on wage increases for the state's home care workers, some of the industry's lowest-paid professions.

Legislators also plan to convert some of the health care worker bonuses pitched by Hochul into permanent wage increases, seemingly taking what was a one-time cost and making it recurring.

Both houses also included money to provide health coverage for undocumented immigrants and an additional $1 billion to assist some of the state's most financially strained hospitals.

"Overall, this is a frenzy," said Bill Hammond, senior fellow for health policy at the Empire Center for Public Policy, a fiscally conservative think tank in Albany.

"Hochul wrote a very generous budget. She has lots of money to spend. Some of it is state revenue, some of it is temporary aid," he said. "She wrote a very generous budget, and the Legislature just piled an awful lot on top of it."

This all, of course, is subject to intense negotiations underway now as the governor and legislators aim to iron out the state budget ahead of the April 1 deadline.

Looking at the entire budget, Hochul, a Democrat from Buffalo, pitched a record $216.3 billion proposal, with the state flush with cash from federal Covid-19 relief dollars and higher-than-expected tax revenues last year.

"Gov. Hochul's executive budget includes bold initiatives to embrace this once-in-a-lifetime opportunity to invest in our future, and we look forward to continuing to work with the Legislature to finalize a budget that serves all New Yorkers," Hochul spokesperson Avi Small said.

The Assembly proposed spending that is about $8 billion more, or 3.6% higher than Hochul's budget, with big jumps in funds for child care, education and health care.

Bea Grause, president of the Healthcare Association of New York State, which represents nonprofit and public hospitals, nursing homes and home care agencies, said the group appreciates the Legislature's proposals to bolster the industry's workforce, infrastructure and finances.

The association, however, hopes to see greater improvements in the final budget to Medicaid payment rates, which many health care facilities rely on for a significant chunk of revenue. The one-house budgets agreed with Hochul's proposal in planning a 1% increase in Medicaid rates.

"We continue to urge state leaders to go further," she said.

A major boost for home care wages

When Hochul released her budget proposal, some legislators said there was one glaring omission: funding to boost the pay of home care workers.

As it is, a home health care worker's median annual salary is just $22,000, according to a recent report by the CUNY School of Labor and Urban Studies.

Those low wages, industry officials argue, will make it difficult to meet a seemingly endless need for more home health and personal care aides, whose total employment in New York is projected to increase from 440,000 in 2018 to more than 700,000 by 2028, the report notes.

Both state houses included funding in their proposals for the Fair Pay for Home Care Act, which calls for home care aides to be paid 150% of the regional minimum wage.

In Western New York, that means home health care workers would make a minimum of $19.80 an hour — which, based on a 40-hour workweek, is about $41,200 annualized.

The proposal isn't cheap: The Assembly is proposing to spend $2.5 billion for Fair Pay for Home Care.

The proposal has backing from major labor unions, trade associations and key legislators.

Hammond, of the Empire Center for Public Policy, is worried about the ripple effects.

He points out that plenty of positions at nursing homes and hospitals pay less than what a home care worker would make under the proposal. For instance, a certified nursing assistant at a Western New York nursing home makes anywhere from $15 to $18 an hour.

"The dedicated staff who work in long-term care deserve better pay across all settings," said Jim Clyne, CEO of LeadingAge New York, which represents nursing homes across the state. "Raising wages for one type of provider and not the others will make staff shortages even worse for those providers that are left out."

That's why, LeadingAge New York argues, the state needs to increase the Medicaid reimbursement, which can help support the higher wages necessary to compete for workers.

Tweaks to health care worker wage proposals

The Assembly rejected Hochul's proposal to provide $1.2 billion in bonuses for health care workers, instead pitching a plan to use that money for permanent wage increases in the Health Department and various human service agencies.

"Instead of giving people a one-shot bonus, we're proposing to provide funding for permanent wage increases for the same workers," said Assemblyman Richard N. Gottfried, a Manhattan Democrat who has chaired the Health Committee since 1987.

The Assembly accepted Hochul's proposal to provide $120 million for bonus payments to state health care workers whose base salary is subject to collective bargaining.

The Assembly's proposal also provides $250 million to support wage increases for health care workers making less than $125,000 annually who would not be included in the Fair Pay for Home Care Act.

Health care for all

Gottfried said most of the arguments between the chambers and the budget division at this point revolve around cost.

One of the areas where the budget division argues the Assembly and Senate have underpriced their proposal is the plan to provide $345 million to include coverage for undocumented immigrants under the state's Essential Plan, which provides health benefits with no monthly premium for qualified low-income people.

"This is an important step in furthering the goal of achieving universal coverage, " said Eric Linzer, president and CEO of the New York Health Plan Association, which represents 29 health plans across the state.

The Health Plan Association also applauded the Senate and Assembly for rejecting Hochul's proposal to reduce the number of Medicaid managed care plans. The proposal envisioned a competitive procurement process that would have resulted in anywhere from two to five Medicaid plans in each region.

In Western New York, for instance, there are seven mainstream Medicaid managed care plans and eight managed long-term care plans, covering a combined 470,000 residents, the association said.

Hochul's plan would have eliminated a couple of those plans locally, potentially leading to job losses and fewer choices for residents, the association said.

Under the proposal, the state was projecting $100 million in savings in fiscal year 2024, which would have grown and recurred at $200 million in following years.

More money for health care facilities

Erie County Medical Center burned through $79 million of cash during the pandemic, with elective surgery restrictions and escalating Covid-related costs chipping away at its balance sheet.

So the safety-net hospital is optimistic about additional funding included in the budget proposals from the Assembly and Senate.

Both houses propose an additional $1 billion in assistance to financially distressed hospitals: $750 million for safety-net hospitals and $250 million for major public hospitals.

The "funding proposals for safety net providers like ECMC and creating a pool of funding for public hospitals are essential to our ability to continue to provide the services our patients need," ECMC spokesperson Peter Cutler said. "Without this critically important funding, we will not be able to reinvest in staff, patient care and improved technology. In fact, cuts to vital services and other hospital-related functions will be inevitable."

The Senate also includes an additional $400 million for the statewide Health Care Facility Transformation Program. Both houses also aim to increase the allocation within that program for community-based providers.

Hochul's budget proposed making a total of $1.6 billion available to fund capital improvements for health care facilities and nursing homes. That funding would be on top of the $3.8 billion the state has appropriated for those purposes since 2014 — $2.1 billion of which has not been spent, according to the Empire Center.

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