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The Health Card
ALBANY, Jan. 12 — The great challenge for Gov. George E. Pataki this year will be to weather a financial crisis without seriously damaging either public services or his chances of re-election in November. The Republican governor is proposing a sprawling health care plan that would get the state through the toughest budget year since the 1970's without major cuts, while adding money for popular items like low- cost prescription drugs for the elderly and breast cancer screening for all women. It would also placate the politically potent health care workers' union, by providing hundreds of millions of dollars for higher wages. Democrats and Republicans alike say the plan is politically shrewd. "George Pataki didn't get through Yale and Columbia Law by being stupid, and this is a very smart move," said Assemblyman Richard N. Gottfried, a Manhattan Democrat and chairman of the Health Committee, who objects to some details, but not to the overall plan. "He has always been very good at either buying or bludgeoning support, when he needed it, from various interest groups and from the Legislature." But some lawmakers and independent budget monitors say that while the plan is smart politics, it is not smart policy, and that it contains sharp reversals by the governor. Mr. Pataki has long been a critic of using so-called one-shots, one-time sources of revenue, to pay for permanent programs. Experts at Wall Street firms and nonprofit groups that monitor government finances say one-shots merely paper over problems in the short run, making them worse in the long run — a view that the governor has endorsed. But Mr. Pataki's latest proposal includes what those fiscal monitors are calling the biggest one-shot in state history. The governor would take a $1 billion windfall the state expects from Empire Blue Cross- Blue Shield's conversion to a for- profit company, and use it to help balance the state's budgets over three years. Other one-shots in his health plan total $131 million in the fiscal year beginning April 1. The governor has yet to propose an overall budget, so it remains to be seen whether it contains other one-shots. In past years, Mr. Pataki has repeatedly tried to curb health care spending, the largest part of the state budget and one of the fastest growing. But now, with the state facing a multibillion-dollar deficit, he is calling for significantly more health care spending, with new and expanded programs that, when fully phased in, will cost $600 million a year. "It's certainly not an auspicious way to begin addressing the state's fiscal problems," said Diana Fortuna, president of the Citizens Budget Commission, a group that monitors public finances. "It's got a huge one- shot and it adds spending to a budget that's already way out of balance." Some influential members of the Assembly's Democratic majority said they would support the Empire conversion only if the state invested its $1 billion share for use over many years, for things like helping uninsured people buy health coverage. "Spending this money quickly would squander a once-in-a-lifetime opportunity," said Assemblyman Alexander B. Grannis, chairman of the Insurance Committee. The governor's plan also relies on a major new infusion of federal aid, more than $1 billion a year, the bulk of which is in serious doubt. Mr. Pataki is asking Congress to raise the federal government's Medicaid payments to New York, to 53 percent of all costs from 50 percent. That would give the state an additional $700 million a year. But Republicans and Democrats alike in New York's Congressional delegation, and many state officials who follow the issue, say that Congress is unlikely to approve the money. "I certainly wouldn't be counting on it," said a Republican congressman from New York. Aides to the Democrats running against Mr. Pataki, H. Carl McCall and Andrew M. Cuomo, say the candidates will accuse the governor of fiscal mismanagement and hypocrisy, but even they do not express great hope that such charges will stick if people are relieved to escape budgetary pain for the next year. Mr. Pataki and his advisers have not forgotten the trauma of 1995, his first year in office, when he tried to make deep cuts in the health care budget to eliminate a big deficit. The health care workers' union, 1199/S.E.I.U., and the hospitals mounted an advertising campaign against the plan and geared up the union's feared phone banks. The governor's popularity plummeted and he backed away from much of his proposal. Since then, Mr. Pataki has cultivated a close relationship with 1199's leader, Dennis Rivera, who played a central role in developing the governor's new health care package. The plan will funnel more money to hospitals and nursing homes to pay higher wages to 1199's members — wages reflected in a new contract announced Friday by 1199 and a major group of hospitals. It could also go a long way toward ensuring that the left-leaning, mostly minority union does not support a Democrat against Mr. Pataki, though both the governor's office and union leaders insist that political considerations never entered into the deal. All that stands between the governor's health care plan and reality are the objections of some legislators, mostly Democrats, about some of its elements. But they are every bit as eager as Mr. Pataki to survive an election year without unpopular cuts, and to please Mr. Rivera. "If I had to guess, I'd say we're going to do it in some form," a top Assembly Democrat said. "It's a package that's hard to resist." URGENT ACTION NEEDED TODAY ON STATE BUDGET FOR HEALTH CARE
SEE editorial below and e- memo from Mark Hannay, forwarded to you.
CALLS TO YOUR ASSEMBLY MEMBERS and TO SENATORS urging them not to go along with the Gov's deal to carve out all the real money from the budget negotiations this year on health. By mis-using the Empire conversion's promise of $1 billion, throwing out the establishment of a health care foundation which is an essential feature of conversion if NYS is to have any hope of getting value from the public assets, and taking OTHER funds to subsidize the deal with 1199, the Governor will succeed in subverting the health care budget process to his re-election campaign. Please make sure our state legislature hears from us TODAY. THis deal is set to be voted on now!
The New York Times Editorial The governor wants to use a one-time payment of $1 billion from Empire Blue Cross and Blue Shield to pay for the first year of a health care package that will continue to cost hundreds of millions annually after this "one shot" of money is long gone. The state has fallen into serious budget problems, but Mr. Pataki's gimmick would allow him and the Legislature to postpone making many of the hardest and most unpopular decisions until after the elections. It is worth noting that Mr. Pataki spent so much of last week's State of the State address complaining about the fiscal irresponsibility of his predecessor, Mario Cuomo. Mr. Cuomo did indeed engage in some irresponsible accounting in order to avoid budget cuts or tax increases. But even the Cuomo administration never balanced its books with a one- time-only infusion of money this size. From the outlines of Mr. Pataki's proposal, as reported over the last few days by Richard Pérez- Pena in The Times, it appears that the one thing certain about this health bill is that it's good politics for Mr. Pataki, who is running for re-election this fall. The centerpiece of the proposal is a package of raises for members of the health care workers' union led by Dennis Rivera. Mr. Rivera has become one of the state's most powerful labor leaders and has shown himself willing to endorse Republicans who support his priorities. The governor's health package, to the extent that it is known even among legislators, apparently would also use other sources of revenue. One is an increase in the cigarette tax - a good way to raise funds for the state's health needs. Another would be an increase in federal Medicaid payments that some key members of Congress doubt could pass muster in Washington. Moreover, the $1 billion payment from Empire Blue Cross would have to come as part of an agreement to allow it to convert to a for-profit company. Other states have used such conversions to set up a health care foundation, an excellent way to assure that the loss of affordable health care is made up by charity or the state. The timing of the plan is a dead giveaway as to how questionable it really is. Mr. Pataki is demanding that the Legislature pass it immediately or risk losing the deal altogether. He is not scheduled to deliver his budget proposal until later this month, but he wants the most important single part of it passed instantly, before lawmakers have had a chance to study it. Any state senator or Assembly member who expects to be taken seriously as an officeholder could not possibly consider voting for something this important without taking time to see how it stacks up against other priorities for the state. It might be nice as well to give the public at least a minute to respond. |
