Budget Passes With Little Noise from Health Backers

Twenty-three hours ahead of deadline, the state has passed its first early budget in almost three decades.

Governor Andrew Cuomo's $132.5 billion budget passed largely in the form he proposed it — closing a $10 billion budget deficit with no new taxes.

Cuomo brought together dozens of different health groups in a six-week process and demanded they propose steep cuts — or be subject to them across-the-board. Eventually his Medicaid Redesign Team found $2.35 billion in savings, most of which come from freezing or cutting state payments to hospitals and other medical service providers.

The government also hopes to save money in the long run by getting more people into managed care programs, especially people with complex health needs and expensive long-term care arrangements.

James Tallon, head of the United Hospital Fund, said New York's Medicaid benefits are still very generous — especially, when considering the calls for much steeper cuts in Washington, D.C., and statehouses around the country.

"If you look at the glass half full, this was Democrats, Republicans, governor and legislature coming together essentially to affirm a reduced, but nevertheless very comprehensive $50 billion Medicaid program in New York," said Tallon, who is also a former state Assembly Speaker. He made the comments Thursday on WNYC'ss Brian Lehrer Show.

New York will continue to have the nation's largest Medicaid budget by far — both in the aggregate and per capita. About one in five New Yorkers is on Medicaid, which accounts for about 40 percent of the state budget.

The Cuomo-backed hospitals wanted to offset payment cuts by imposing a limit on medical malpractice awards for pain and suffering. But in the final days of negotiation, Assembly Democrats managed to reject that proposal.

The legislature, however, did retain a proposal to set up a special insurance fund for hospitals that are sued for birth defects. The fund will be financed by a 1.6 percent tax on all hospital births. It will cover the legal settlements, reducing the cost of malpractice insurance.