Cuomo Helped Get New York Into This Mess

Cuomo Helped Get New York Into This Mess

Cuomo Helped Get New York Into This Mess

The governor’s position on health care spending looked starkly different a couple of months ago.


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As the novel coronavirus rages in New York, killing more than a thousand and locking down millions, Governor Andrew Cuomo has emerged as the hero of the moment. On television, he is everything Donald Trump is not: calm, coherent, and blunt, in a strangely reassuring way. He is becoming a #resistance hero. Some people are (literally) falling in love with him.

But the same Cuomo who is racing to expand New York’s hospital capacity and crying out for more federal resources is quietly trying to slash Medicaid funding in the state, enraging doctors and nurses, and elected officials of his own party. The same Cuomo who holds press briefings at a major New York City convention center, now the home of a temporary 1,000-bed hospital, presided over a decade of hospital closures and consolidations, prioritizing cost savings over keeping popular health care institutions open.

It’s the same Democratic governor—every liberal pundit’s tried-and-true Trump antidote—who is doing damage to his state’s health care system at the worst possible moment, in the eyes of the critics who follow him most closely.

“Andrew Cuomo has repeatedly stated, over and over again, that New York has excess capacity of hospital beds, that it’s too expensive and not needed and we need to reduce spending. He said this over and over again throughout his entire tenure,” said Sean Petty, a pediatric nurse at a public hospital in the Bronx and a high-ranking member of the state’s politically active nurses’ union. “If this budget goes through in April, next year’s health and hospitals budget is going to be devastating.”

What’s striking to Petty and other health care experts is how Cuomo has not backed off his plan to cut Medicaid, despite the horrific Covid-19 outbreak. Earlier this year, Cuomo empaneled what is called a Medicaid Redesign Team to slash Medicaid spending in New York after a $6 billion budget shortfall, driven largely by rising Medicaid costs, became evident in late 2019.

Medicaid enrollment has been growing about 13 percent a year and is now a $70 billion program in the state. More than 6 million New Yorkers are on Medicaid, which has meant just 4.7 percent of the state is uninsured, a historic low.

The Affordable Care Act has boosted Medicaid enrollment in New York. Though Medicaid is a federal program that provides low-cost, comprehensive health care to the poor, the state still picks up almost half the costs, with county governments also bearing a small share.

Some of the budgetary abyss has been the Cuomo administration’s own making: postponing Medicaid payments and failing in the past to iron out inefficiencies like the state’s paying Medicaid costs for relatively wealthy, private hospitals that don’t need the aid in the first place. Despite his reputation as a big-government progressive, Cuomo has held to a self-imposed caps on state spending and property tax increases, putting additional strains on local governments trying to fund municipal services.

“You want to target whatever cuts are necessary and target in the smartest possible way,” said Bill Hammond, the director of health policy at the Empire Center, a right-leaning think tank that frequently analyzes health care spending in New York. “You want to go after wasteful programs but you want to try to protect the needy, the vulnerable and seriously ill and disabled recipients.”

Medicaid is a lifeline for so-called safety net hospitals, the public institutions serving the urban poor in New York City and the rural poor in the northern and western reaches of the state. These are the hospitals on the front lines of the Covid-19 crisis. Struggling for support in ordinary times—their patients usually lack the sort of private health insurance that offers generous reimbursements—they are now on the verge of collapse. Elmhurst Hospital, a Queens public hospital at the center of the pandemic, is so overwhelmed that a refrigerated trailer is stationed outside as a makeshift morgue.

“It’s obscene,” said State Senator Gustavo Rivera, a Bronx Democrat who chairs the Senate Health Committee. “These are immoral actions that the governor is taking.”

With the state budget for the next fiscal year due on April 1, Cuomo is proposing to gut Medicaid by $400 million, part of $2.5 billion in cuts he’s seeking over several years. So determined is Cuomo to slash Medicaid spending that he’s prepared to reject more than $6 billion in matching federal aid approved earlier this month because it would force him to alter his austerity strategy.

If Cuomo gets his way with the state budget, many of the city’s most besieged hospitals will lose money at a time when Covid-19 is threatening to crash New York’s health care system. Central Brooklyn hospitals, serving many of the borough’s working class and poor, could lose $38 million a year. Manhattan hospitals could lose up to $58 million a year.

“The virus is just one illustration of why it’s important to have a strong public health care system,” said Naomi Zewde, an assistant professor in the Graduate School of Public Health and Health Policy at CUNY.The proposal to cut funding to public hospitals during a pandemic reflects really poor decision-making.”

Cutting Medicaid has been a priority of Cuomo’s since he took office in 2011. In his first term, another Medicaid Redesign Team shrunk Medicaid reimbursements, damaging the financially fragile health care facilities that serve low-income patients. Hospitals, meanwhile, have been shutting their doors across the state. Part of this reflects a national trend toward consolidation and a movement to ambulatory and outpatient care, as well as the inflation of medical costs and a change in federal reimbursement formulas for Medicare and Medicaid.

What’s more, the state has lost more than 20,000 hospital beds over the last 20 years. Cuomo, who has governed for almost half that period, never advocated for any kind of expansion of hospital beds until last month; he now says New York needs 110,000 beds, more than double the current capacity. He has never been a forceful advocate for keeping hospitals open; in fact, he’s empowered bureaucrats who’ve argued aggressively to shutter them.

In 2006, under Republican Governor George Pataki, a commission recommended closing more than 20 hospitals and shrinking and merging dozens of others. Stephen Berger, the investment banker who chaired that commission, would serve on Cuomo’s first Medicaid Redesign Team, which cut funding for Medicaid during his first term. In 2013, Berger argued that more New York hospitals needed to close, writing that “allowing hospitals that have outlived their usefulness to close is a necessary step in the transformation of our health-care system.” The safety-net hospitals serving the city’s poor were losing too much money, he wrote, and couldn’t be sustained anymore, especially with the rise of community-based primary care.

That year, the Cuomo administration approved the closure of the 500-bed Long Island College Hospital in Brooklyn, over loud community protest. “Cuomo basically turned the Department of Health into a rubber stamp for every closure certificate needed,” Petty said.

It’s inarguable that Medicaid spending in New York is—and will keeprising. At the same time, the Covid-19 pandemic is eviscerating New York’s economy as tax revenue evaporates.

A spokesman for Cuomo, Rich Azzopardi, pointed to recent comments Cuomo made in response to questions about his continued push for a $400 million Medicaid cut. Yeah look, we have no money, right? Life is options—the state has no money,” Cuomo said.

But it isn’t as if the state government has no options. Activists, elected officials, and the New York State Nurses Association want Cuomo to raise taxes on the state’s many millionaires and billionaires to make up for some of the looming shortfalls. Cuomo could also increase corporate taxes, further raise the millionaire’s surcharge, and reinstitute a tax on stock transfers, which the state ended in 1981. (Technically, taxes are still paid on stock transfers but the state refunds 100 percent of the revenue. In their January budget testimony, NYSNA estimated that a stock transfer tax could generate  $20 billion annually.)

Empire State Indivisible, a leading progressive organization, has called for the creation of special taxes for millionaires earning in excess of $5 million, billionaires, and a new tax on luxury homes and apartments.

Cuomo approved a millionaire’s tax in his first term in the aftermath of the 2008 economic crash, but has otherwise been averse to hiking taxes on the wealthy—possibly because his budget director used to work for the State Senate Republicans, who long held the majority, with Cuomo’s tacit approval. Cuomo’s resistance to raising taxes puts him out of step with even plutocrat-friendly executives. After 9/11, Mayor Michael Bloomberg, a billionaire himself, forced through a less-popular property tax hike to fund city services at a time when businesses were reeling and few tourists wanted to come to the city.

These days, the best hope for the health care providers and advocates who want to save hospitals from further gutting is for Cuomo to simply change his mind. As governor, he holds inordinate power over the state budget, where he wants his cuts enshrined. Lawmakers may have to choose between rejecting his cuts or shooting down the state budget altogether in a time of singular catastrophe.

“We need to do this in a calmer fashion. Right now we are dealing with a crisis. Let us deal with the crisis,” Rivera, the state senator, said. “We need to make sure the institutions dealing with the crisis aren’t gutted post-crisis.”

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