January 3, 2024
Good evening,
Yesterday, Gov. Hochul proposed a plan to broadly wipe out some New Yorkers’ out-of-pocket insurance co-payments for insulin, the ubiquitous but sometimes pricey diabetes treatment. The plan would cover New Yorkers on state-regulated insurance plans and would amount to the strongest ban on insulin cost-sharing in the U.S., saving New Yorkers $14 million in 2025 alone, according to the governor’s office. About 21% of New Yorkers have health insurance regulated by the state’s Financial Services Department, according to government data.
One could see the Governor’s prioritization of consumer protections and affordability as a positive sign in light of ongoing advocacy to make care for mental health and substance use disorders more affordable for New Yorkers and especially those with commercial insurance but only if waiver of the cost share does not result in losses for the provider. Rates paid by commercial insurers for these services are (on average) about half of the reimbursement rates paid by Medicaid for the same service. Commercial reimbursement rates factor in the cost share being collected by the provider – in other words, the provider is paid a rate that already assumes the cost share will be collected by the agency. As such, the details of any proposal to waive co-pays and deductibles will need to be finely tuned to ensure providers don’t get left holding the bag.
The Governor’s second State of the State proposal, released earlier today, relates to education and literacy. A quick reminder that the State of the State address is scheduled for next
Tuesday, January 9, and release of the executive budget proposal is scheduled for January 16. It’s a quick start this year. Stay tuned.
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5 things to watch as NY’s 2024 legislative session begins
BY KATE LISA NEW YORK STATEUPDATED 5:39 AM ET JAN. 03, 2024 PUBLISHED 9:58 PM ET JAN. 02, 2024
As lawmakers return to Albany on Wednesday, they’ll brace for six months of legislative work they hope to boast about to constituents when they campaign for re-election in the second half of the year amid a torrent of national contests.
Fiscal uncertainty and a projected $4.3 billion budget deficit hangs over elected officials as they wait for the details of Gov. Kathy Hochul’s annual State of the State and budget addresses later this month. And Democrats and Republicans are expected to continue their annual spar over public safety measures and other policies affecting the affordability of the state — top concerns for New York voters, especially after hundreds of thousands of people have left the state.
Here are five things to watch for as the 2024 legislative session gets underway:
1. Housing
The Legislature last year deadlocked to address the state’s affordable housing crisis — leaving Albany last June making little progress on how to build more units across New York, and quickly, while also keeping people in existing homes.
Lawmakers and Gov. Hochul are feeling heightened pressure to address housing affordability after they clashed on details of possible tax credit programs and anti-eviction provisions to reach a consensus on a housing plan last year.It led Hochul to sign a handful of executive orders, including $650 million in grants for local governments most open to new housing projects. Localities continue to wait for state Homes & Community Renewal to select which communities will be prioritized for the funds.
Democrats don’t see eye to eye on the best way forward for housing in New York, with the more progressive arm fighting against too many incentives for wealthy developers, arguing the state cannot build its way out of the crisis.
But lawmakers leading the Senate and Assembly Housing committees are revisiting a legislative housing proposal from the end of last session that Hochul rejected. They’ll have to balance building incentives, stronger tenant protections, tax breaks like replacing New York City’s expired 421a program and programs to transform unused office or retail space into new apartments to reach a compromise so everyone gets something they want. Housing is expected to be at the forefront of state budget discussions as the governor and Legislature must work together to close a $4.3 billion project deficit ahead of the April 1 deadline.
2. Migrants and asylum seekers
More than 168,000 migrants have arrived in the state since 2022 — up at least 18,000 people in the last two weeks. The ongoing humanitarian emergency will be addressed in the next budget after the state spent more than $2 billion this year to provide assistance to asylum seekers.
As the influx isn’t slowing down, officials say they will petition President Joe Biden’s administration and members of the state’s Congressional delegation harder to expedite workforce authorization for more asylum seekers or rules to ease the tide of newcomers after their pleas have gone largely unanswered for more than a year.
“The bottom line is, we need a federal solution,” Hochul told reporters Tuesday. “We have not stopped our request to have more controls at the borders. The volume of people coming here is untenable and unsustainable.”
Some state lawmakers want the Legislature to pass measures this session to help connect asylum seekers with housing, employment opportunities and health care, and will push for the state to lead through federal inaction. But it may not be a realistic legal, or fiscal, expectation for the state.
3. A looming $4B budget deficit
New York’s fiscal leaders have revealed little about Gov. Hochul’s budget plans, except they will avoid cutting health care or education services in FY 2024-25 as state agencies were directed to keep spending flat.
Updated financial estimates show the Legislature must pass its next budget and close a $4.3 billion shortfall.
But the State University of New York system will amass a $1 billion budget gap over the next decade without additional state assistance or permission to increase tuition costs, according to a report SUNY filed with the Legislature last week. And the steady flow of migrants means a need for more services and related resources, making it more difficult to reduce spending with higher costs across the board.
Gov. Hochul has said the state will not further increase taxes on the wealthy, or New York’s millionaires and billionaires, to raise revenue — backed by the state comptroller and state’s fiscal watchdog the Citizens Budget Commission.
But a growing number of Democrats, including Assembly Speaker Carl Heastie, say they won’t back down in pushing for New York’s highest income earners to pay higher taxes and help the state provide necessary services.
Lawmakers have floated other ideas to raise revenue, including legalizing mobile casino betting or reforms to open more cannabis dispensaries across the state, with about 40 open nearly two years after legalization.
4. Redistricting
Members of the state Independent Redistricting Commission met last week with less than two months to draft new congressional district lines.
Commissioners must submit amended New York U.S. House of Representatives maps to the state Legislature by Feb. 28 after a ruling in the state Court of Appeals last month, which could have a pivotal impact in helping Democrats secure control of the House in November.
If the commission fails to submit maps to the Legislature by the deadline, the Legislature will again draw the maps themselves, as it did in 2022 when the commission failed to reach a consensus. The state’s highest court is open to issuing an order to force the commission to vote on a set of maps to advance the constitutional process, according to the ruling.
The Legislative Task Force on Reapportionment oversees the redraw of elective district maps that come to the Legislature. “We’re not drawing maps, we’re not thinking about drawing maps,” Senate Deputy Majority Leader Michael Gianaris told NY1 on Tuesday.
Gianaris co-chairs LATFOR with Assemblyman Kenneth Zebrowski.
“We’re just waiting and hoping that the commission gives us something that we can work with,” Gianaris said.
5. Hochul’s relationship with the Legislature
Gov. Hochul and the Legislature have done each other favors and collided in the past, but it’s unclear how the governor’s recent decision to veto several high-profile bills at the end of the year will fracture their relationship in 2024.The governor vetoed the Grieving Families Act for the second time and others for the first, including a ban on noncompete agreements, a transparency bill to make it more clear who owns LLCs, an amendment to the upcoming statewide public campaign finance system and legislation to require the disclosure of information relating to lobbying for the nomination or confirmation of someone tapped for a state office position, among others.
She also squashed more than 30 bills that would have created task forces or study groups on various subjects, arguing it would cost the state tens of millions of dollars to complete the work.
It’s past the time where the Legislature could override the governor’s vetoes, which would have required a 2/3 majority vote before Dec. 31. Democrats secured a veto-proof majority in 2020, but have yet to use their numbers to upend Hochul’s use of her veto pen. Heastie and other top lawmakers have said they are not interested in taking that action and risk rupturing their relationship with the governor.
Hochul and lawmakers Tuesday disagreed on the factors that led to the vetoes. The governor criticized the Legislature for passing hundreds of bills at the end of session without public hearings and little engagement with the Executive Chamber. She argued it put her office in an unnecessary time crunch.
“We can get to fewer vetoes, but let’s have more common sense involved in the process of developing the legislation,” Hochul said. Gianaris said the governor’s comments were concerning, and reveal the executive does not understand nuances of the legislative process.
But Heastie on Tuesday pointed to last year’s budget, which was adopted more than one month late, after the governor insisted on including large policy items in the $229 billion spending plan.
“I don’t agree with her assessment, but I also say this: Then I hope that means we won’t see any policy in the budget because the policy she put forth in her budget, there was no hearing … when she proposed it to us,” Heastie said.
Six Mount Sinai hospitals ousted from UnitedHealthcare’s network amid payment dispute
Insurance giant UnitedHealthcare is no longer offering in-network health care coverage at a handful of Mount Sinai hospitals as of the beginning of this year, following a months-long negotiation with the health system over its payment rates.
United, which also owns Oxford Health Plans, moved Mount Sinai Morningside, Mount Sinai West, Mount Sinai South Nassau, the New York Eye and Ear Infirmary and Mount Sinai Brooklyn out of its network for commercially insured patients as of Jan. 1. United patients with employee-sponsored and individual health plans also lost in-network coverage at Mount Sinai Beth Israel, which the health system is planning to shut down later this year.
Some locations remain in-network as the negotiations between Mount Sinai and United continue. The Mount Sinai Hospital on the Upper East Side, Mount Sinai Queens and their affiliated outpatient locations will remain in United’s network until at least March 1. Additionally, fully-insured commercial members will have in-network access through the end of February due to New York’s cooling off rules, which require insurers to preserve health coverage for a period of time past the end of a contract. The contract negotiations do not affect network access at Mount Sinai’s physician locations.
United is required to continue covering emergency care at in-network rates across all Mount Sinai locations indefinitely. Additionally, patients who are in the middle of getting treatment for more serious health conditions such as cancer will be eligible for continued in-network benefits.
Approximately 100,000 patients have been impacted by the changes to United’s network thus far, according to Lucia Lee, a spokeswoman from Mount Sinai.
United’s decision to move Mount Sinai hospitals out of its network comes amid disagreements between the insurer and the health system about Mount Sinai’s payment rates. Mount Sinai had a three-year commercial contract with United that began on Jan. 1, 2022 — but 20 months into that contract, the health system issued a term notice requesting higher reimbursements, according to United.
Mount Sinai says that United pays it 30% less than its peer health systems on average and up to 50% less for certain procedures, and has since proposed rate increases. But the insurer says that Mount Sinai’s proposal would make its hospitals “the most expensive by a considerable margin in New York City.”
United, the country’s largest health insurer, has 900,000 members in New York City who could potentially lose access to in-network benefits at Mount Sinai hospitals. Cole Manbeck, a spokesman for the insurer, said that 27,000 members received health care services within Mount Sinai Health System over the past year.
“We are disappointed that United Healthcare and Oxford have limited access to Mount Sinai Hospitals and physicians,” Lee said, adding that “Mount Sinai must be paid fairly.”
Lee added that United’s payment rates for a number of health services provided by Mount Sinai are far lower than its peer systems, noting that the insurer pays New York-Presbyterian $25,911 for a normal vaginal delivery, while it pays Mount Sinai $15,989 for the same procedure.
Mount Sinai is consistently reimbursed at lower rates under United and Oxford plans compared to other private health systems in New York City, according to the health cost data company Turquoise Health. For example, Mount Sinai Hospital receives $4,418 from United commercial plans for a diagnostic colonoscopy exam while New York-Presbyterian’s Weill Cornell Medical Center receives a $5,445 reimbursement for the same procedure. NYU Langone’s Tisch Hospital gets a $6,226 rate under United’s PPO plan.
The federal government requires hospitals to publish the price of medical procedures on their websites, but compliance with that rule has been sparse and cost data is often not accessible to patients. Last June, New York City passed a law that would establish the nation’s first Office of Health Care Accountability to improve hospital cost transparency.
Despite claims that Mount Sinai’s rates are below its peer systems, United said that the health system’s current proposal would make it the most expensive in the city. Mount Sinai has asked for a 50% price hike, which could raise New Yorkers’ health care costs by more than $600 million over the next three years, according to the insurer. United estimates that Mount Sinai’s current proposal could increase how much members pay out-of-pocket for health care by approximately $100 million.
Lee said that the claim that Mount Sinai’s proposal will raise health costs by $600 million is “patently false,” adding that “by removing access to Mount Sinai, United is removing the lower cost option for their members.”
But United said it cannot agree to the 50% price hike that Mount Sinai has asked for.
“We remain committed to continued discussions with Mount Sinai should the health system provide a realistic proposal New Yorkers and employers can afford,” Manbeck said. “However, our top priority at this time is ensuring the people we serve have access to the care they need through either continuity of care or a smooth transition to a new hospital.” — Amanda D’Ambrosio