New York State Budget Cuts for State Workers

							Public Forum: Budget issues in Health, Education, Higher
Education, and Social Services, including proposed cuts to
the 2008-2009 budget and 2009-10 budget priorities

New York State Senate Democrats
December 11, 2008




Testimony By:
Heidi Siegfried, Esq.
Director of Health Policy
Center for Independence of the Disabled
Program Director
New Yorkers for Accessible Health Coverage




NYFAHC is an independent project of the Center for Independence of the Disabled in NY (CIDNY)
Good Morning. My name is Heidi Siegfried and this testimony is submitted on
behalf of New Yorkers for Accessible Health Coverage (NYFAHC) a coalition of more
than 50 New York State organizations that provide services counseling, education
and outreach to New Yorkers with serious illnesses and disabilities. NYFAHC is a
project of Center for the Independence of the Disabled, NY. We appreciate the
opportunity to share with you our thoughts about the New York State’s budget and
our recommendations.

Vulnerability of people with disabilities and serious illnesses to cuts in
health care and insurance.

Now, as New York and the country are experiencing this economic downturn, is not
the time to cut health care coverage. New York’s unemployment rate has reached
5.8 percent and is expected to reach 7.1 percent next year. Unemployment
insurance claims have increased by 59 percent, from approximately 58,000 in
November 2007 to more than 92,000 in November 2008 and the NYS Department
of labor has this week added staff to handle the additional calls regarding claims,
which last month amounted to nearly 826,000 calls compared to just over 322,000
in November 2007.

We can expect, as workers lose any employer based health insurance coverage
they have, that they will be turning to the direct pay market and to public health
insurance programs for health care coverage. For people with serious illnesses
and disabilities, maintaining quality comprehensive health care coverage may be
critical to their very survival. Consumers with disabilities need to be able to access
health coverage so that they can get the necessary preventive and primary care to
avoid a costly trip to the hospital. Just this week the American College of
Emergency Physicians released a report noting the increasing numbers of the
unemployed and uninsured turn to the nation’s emergency rooms as a medical last
resort, after delaying care.

Protecting consumers turning to the direct pay health insurance market
for coverage.

Consumers turning to the direct pay health insurance market face increasingly
unaffordable premiums. People routinely remark that COBRA premiums are simply
too expensive. Nevertheless, we recommend that the New York extend COBRA to
36 months as California has done.

We are concerned about the Governor’s proposed increase in the Covered Lives
Assessment which will be passed on to consumers in their premiums. To
prevent this we should require health care plans to devote at least 90% of our
premiums to health care by raising the minimum medical loss ratio to 90% for
the individual and small group markets. This would also be a good time to
restore “prior approval” by the State Insurance Department for proposed rate
increases in these markets and require public hearings when premium increases
exceeding 5% in a year are proposed to keep rate increases under control. We
should also pool and split the funding for the Direct Pay and Healthy New York
“stop loss” pool to keep premiums stable by reinsuring high cost claims.

New Yorkers For Accessible Health Coverage                                      2
Protecting people in need of public health insurance.

Already the Health Department reports that applications for Medicaid were up 30
percent between December 2007 and April 2008, to about 39,000 and this is for a
period before the serious downturn began in September. The state budget office
projects a 5 % gain in the government health programs for the poor. We need to
continue to avoid cuts to public insurance programs such as reductions in eligibility,
scaling back of benefits and increased consumer cost-sharing and appreciate that
these have not been put on the table so far.

Finally, we should expand Family Health Plus. Currently, only pregnant women
with incomes up to 200% of the Federal Poverty Level (roughly 230% gross are
eligible for publicly funded health care coverage. NYFAHC urges the expansion
of Family Health Plus to this level for all adults -- singles, childless couples, and
parents in order to have two income eligibility rates: one for adults and one for
children. We can expect that the new administration in Washington will
approve this expansion.

We can also expect a stimulus package from the federal government which will
include an increase in the federal matching funds for our Medicaid investments.
In 2003, the federal government provided $20 billion in fiscal relief to states:
$10 billion as enhanced FMAP (Federal Medicaid Assistance Percentage) and
$10 billion as a block grant. New York received $1.5 billion in enhanced FMAP
and $645 million as a flexible block grant. Any FMAP increases we receive must
be reinvested in health care.

Making delivery of public health coverage more effective and efficient.

There are a number of things we need to do, during this period, to make sure that
public coverage is accessible to newly eligible New Yorkers. New Yorkers, who
have not previously had to endure the application process, may find it frustrating
and give up resulting in higher medical costs later. We should eliminate the asset
test for adults in public programs. It is cumbersome for agencies to administer and
rarely disqualifies people for coverage. New York should join 21 other states and
eliminate it as a condition of eligibility. We should eliminate the face-to-face-
application requirement. Currently New York is one of only a handful of states to
still require a face-to-face interview at application. Face to face interviews are
administratively costly and are a barrier particularly for working people, rural
applicants and immigrants. New York should allow people to apply for insurance
through, mail, fax, and telephone. We should eliminate the finger imaging
requirement. Many eligible individuals, particularly seniors, people with disabilities,
and immigrants; view the finger imaging requirement as intrusive or are
intimidated by the process. New York should drop this requirement for adult
Medicaid applications.

In addition we should, expand community-based facilitated enrollment.
Facilitated enrollment (FE) has is the single most effective strategy for finding
eligible people and enrolling them in public coverage. Facilitated enrollers do
outreach to enrollees and assure that they understand the application process
and successfully complete the enrollment. The current facilitated enrollers were

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selected for their ability to reach out to families and children. The types of
community-based groups with connections to people with serious illnesses and
disabilities are different from the current family-friendly facilitated enrollers. If
the state is to be successful in improving outreach and enrollment to everyone,
the FE program must be expanded to include additional relevant community-
based organizations that can enroll these hard to reach populations .

The cost savings of investment in health care.

New York should continue to invest in primary, preventive, community based
and home care programs to lessen the need for costly hospitalizations and allow
people to stay in their homes. The Nursing Home Transition and Diversion and
Traumatic Brain Injury waiver programs are examples of investments in health
care that reduce costs. Deep budget cuts to home and community based
programs would deny services that keep people independent and force many
people to move to more expensive institutional care. People want to live
independently in their homes and communities for as long as possible. A 2007
AARP Long-Term Care survey found that 80% of surveyed New Yorkers age
50+ prefer to receive their long-term care services in their homes. New York
should increase access to and use of consumer directed services; expand who
can serve as a personal assistant to include some family members; invest in
transitional services/training for individuals who wish to participate in the
Consumer Directed Personal Assistance Program.

The state should invest in programs providing comprehensive support services for
high users of Medicaid, in order to reduce medical services needed by those who
choose to receive them. A California program to support frequent users of hospital
services was able to reduce inpatient expenses by 14% after one year, and 69%
after two years.

The state should also provide housing subsidies for those high users of Medicaid
who are homeless. In the same California program, for those participants who were
homeless at the start and obtained housing through the program, hospital charges
went down 27%. In contrast, for those who remained homeless, hospital charges
increased by 49% despite the provision of other supports.

Long term effects and potential unintended costs of implementing cuts
such as those proposed by the Governor.

The Governor has proposed to save $50 million through cuts to early detection and
treatment which will have obvious long term consequences. With the exception of
infertility services and grants, all of these cuts -- to School Based Health Centers,
Prenatal/Postpartum programs, asthma, diabetes, hypertension, minority male
wellness/screening, mammography, cervical cancer screening and other cancer
related services will result in higher health care costs down the road.

Sustainable revenue and financing structure.



New Yorkers For Accessible Health Coverage                                        4
The state cannot solely cut its way out of this crisis. In fact large cuts could be
detrimental to our recovery. We must look at raising additional revenue through
tax reform.

CIDNY is part of the One New York—Fighting For Fairness Coalition, and we urge
Senate Democrats to support the Coalition’s recommendations to raise revenues
through a more progressive personal income tax. Today’s tax rate on the highest
income New Yorkers is far lower than in the 1980 level or even the 1990 level.
Since they received the bulk of the wealth produced from the past decade of
intense economic growth in this state, the richest New Yorkers have the capacity to
pay a slightly higher tax rate without financial harm.

We support saving money by increasing the bulk purchasing of prescription drugs
by working with neighboring states so we can get larger discounts.

We also urge you to pass a Bigger, Better Bottle Bill, giving the state $200 million a
year in deposits from unreturned bottles, rather than allowing bottlers to retain
these funds contrary to the law’s intention.

Finally, we urge the Senate Democrats to focus on the Partnership for Coverage
modeling being completed early next year by the Urban Institute. There is no
substitute for health coverage that will cover all New Yorkers and we cannot lose
sight of that goal. In polling done after the downturn began in October, 62% said
that, given the economic challenges facing the country, it is more important than
ever to take on health reform.

Thank you for your time and consideration.




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