New York Gov. David Patersons $5.2 billion plan to curb a mushrooming state budget deficit through March 2010 includes some $1.8 billion from Medicaid cuts and higher fees for insurers. New York legislators will meet in Albany on Nov. 18 for the states second emergency budget session this year.
Paterson, announcing the plan at a news conference in New York, called the cuts severe and painful but necessary.
Wall Streets protracted crash since September wiped out gains made in August to close the states budget gap. The states general fund is projected to fall short by $1.5 billion for the fiscal year that ends March 30, 2009, and by $12.5 billion the following year.
The governor stressed the cuts are proportional to spending. Combined, healthcare and education account for roughly 52% of the states general fund for the current fiscal year. Proposed cuts to the two sectors for the same period total $1.2 billion, or about 57% of the projected $2 billion in savings. Cuts to hospital payments account for nearly $738 million or about 40% of Patersons proposal.
Patersons plan would curb Medicaid spending growth to 1% from 2%. Hospitals and nursing homes would see reimbursement from the safety-net insurer cut by 8% through the end of New Yorks fiscal year in March and a 2% rate cut in the following fiscal year. Home- and personal-care payments would be cut by 1%. The plan also eliminates an increase for inflation during the 16-month period for hospitals, nursing homes, and home- and personal-care, and raises fees for insurers.
In a joint statement, the Greater New York Hospital Association and the Service Employees International Union 1199 called Paterson's healthcare savings unfair and unsustainable. -- by Melanie Evans