State Budget Threatens Health Care

Advocates point to admission Family Health Plus cuts hurt 25,000 New Yorkers

Testifying at a state budget hearing, Dr. Antonia C. Novello, the state’s health commissioner, said that tougher eligibility requirements for Family Health Plus (FHP) could result in 25,000 New Yorkers losing their coverage under the state-run health insurance plan.

“The governor has proposed a series of categorical eligibility changes,” said Liz Krueger, a state senator who represents Manhattan’s Upper East Side. “I asked what the impact of these changes would be… She danced quite a bit and then one of her staff came up to her and said about 25,000 people.”

As part of his January 18 budget proposal, Gov. George E. Pataki had to close a projected $4.2 billion gap in the $105.5 billion state budget for the fiscal year that begins on April 1.

State spending on health care will reach $44 billion in the next fiscal year and Medicaid, which covers health costs for the poor and disabled, took a $1 billion cut. Medicaid dollars fund FHP, an insurance plan for low-income workers.

Under the changes, New Yorkers would not qualify for FHP if they have $10,000 or more in assets, if they have had health insurance in the prior 12 months or if they work for a business that has 50 or more employees whether that business offers a health insurance plan to its employees or not.

“That there is now an asset cut-off will probably not affect many of our patients, but I do believe that a significant number of our patients work for companies with more than 50 employees,” said Jay Laudato, executive director of the Callen-Lorde Community Health Center.

The gay community health clinic has a $9.7 million budget with $1.1 million coming from Medicaid reimbursement and another $640,000 coming from payments through FHP enrollees.

After FHP was launched in 2001, the agency was enrolling 20 to 30 new FHP clients each month. That number is closer to 15 per month now. The cuts would require new FHP applicants to sign up at a state Medicaid office and agencies like Callen-Lorde could no longer do “facilitated enrollments,” Laudato said.

Pataki eliminated FHP coverage for services such as dental, vision, home health aides, hospice care, mental health and substance abuse. The FHP plan also includes increased co-payments for hospital stays—$250—and drugs at $10 for generic drugs and $20 for brand name drugs.

Krueger said that Novello was generally unsympathetic.

“The general theme of Dr. Novello’s response to any questions about the $1 billion is ‘Look you should be happy we’re not doing more,’” Krueger said of the health commissioner’s January 31 testimony.

A telephone call seeking comment from the state health department press office was not returned.

When FHP started, Pataki estimated that the program could eventually cover anywhere from 619,000 to 800,000 New Yorkers. The program has enrolled 470,000 people to date, according to a State Assembly budget document.

Advocates criticized the Pataki administration for falling short on enrollment and now cutting the program.

“They have not done as complete, as comprehensive, a job on enrollment as they could and should have done,” said Michael Kink, legislative counsel at Housing Works, an AIDS service organization. “Now they are whining that even over half the folks that they expected are too expensive for them. I think we can find a way to cover folks.”

Advocates also said that the state continues to spend public dollars on expensive hospital and nursing home care while shortchanging community-based groups and preventive services.

“I clearly do not see a coherent strategy behind the governor’s health budget reductions,” Laudato said. “It does not appear to me that the governor is going after the largest areas within the health budget to achieve cost savings and improve access, but is focused on areas in which he can quickly make cuts.”

Kink said that the governor may be avoiding a fight with a powerful healthcare industry with the cuts.

“I think that they are talking the path of least resistance, trying to impose some cuts in eligibility and services where they can, trying to suggest some methods for restructuring where they can, but there has not been a serious and intelligent rethinking about what it would mean to have comprehensive health programs for the entire state,” he said. “We have been talking for more than a decade about putting more into community-based resources. What we have kept doing is investing billions and billions of dollars in hospitals and nursing homes.”

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