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New York Governor Proposes Budget With $1B In Health Care Cuts

Armen Hareyan's picture

New York Gov. Eliot Spitzer(D) on Tuesday proposed a $124.3 billion budget plan for the upcoming fiscalyear that includes a $1 billion reduction in health care spending, the New York Times reports. Spitzer proposed $980million in cuts to Medicaid and other health programs, in part by changing theway the state reimburses hospitals and other providers to emphasize preventivecare and by changing the way the state purchases medications in bulk.

The budget proposal also would reclassify HMOs as insurers for tax purposes,which would generate more than $200 million annually. In addition, Spitzerproposed increasing other fees charged to health insurance companies by $50million. According to the Times, Spitzer "did not ruleout" making further cuts later this year, if necessary.

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The Greater New York Hospital Association and 1199 United Healthcare Workers East -- part of the Service Employees International Union -- in a statement said they were"troubled by the enormous ambiguity surrounding the financial impact on New York hospitals"(Hakim, New York Times, 1/23).


Spitzer's plan increasesspending by only 5%, closes the state's $4.4 billion budget deficit and"at the same time remains true to core priorities," one of which is"smart changes in health care delivery and reimbursement," accordingto a Long Island Newsday editorial. The editorial adds,"That is admirable," as is "his readiness to invest in providingmore health insurance to more kids." The editorial concludes, "Tougheconomic times will make this year's budget negotiations wrenching, yet theymight well create the climate for a much fresher new look at how our taxdollars are spent" (Long Island Newsday,1/23).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.