Opinion: Many vulnerable New Yorkers lose in Hochul’s first state budget

There’s still time to cancel a prescription drug benefit carve out from New York’s Medicaid managed care program designed by the governor’s predecessor.

New York State Capitol in Albany

New York State Capitol in Albany Michael M. Santiago/Getty Images

After months of promising to fight inequities and fix our broken health care system, Gov. Kathy Hochul’s first budget proved to be a boon for billionaires, and a bust for vulnerable New Yorkers who rely on the state’s social safety net for vital services.

Health care advocates had hoped the governor would make a clean break from her predecessor former Gov. Andrew Cuomo, by permanently repealing his pre-pandemic Medicaid prescription drug carve-out, which will gut New York’s social safety-net providers.

But now that the budget dust has settled, with a whopping $220 billion spending plan in place that seems to have something for everyone, the Cuomo carve-out is somehow still in place, leaving 2.3 million New Yorkers in limbo. But there’s still time. The governor and state lawmakers have until the session ends in early June to make things right.

The Medicaid Pharmacy Benefits program allows safety-net providers to buy discounted drugs and use the savings on other programs for patients, like food, housing aid and transportation. It provides vital support to vulnerable populations, the majority of whom are low-income and people of color - at no cost to taxpayers. 

In 2020, then-Gov. Cuomo and his Medicaid Redesign Team II concocted a plan to carve those prescription drug benefits out of New York’s Medicaid managed care program to help plug a budget shortfall. Changing the program would allow the state to redirect a fraction of the funds to its own coffers and away from safety-net providers – a cruel and short-sighted attempt to balance the budget on the backs of the sick and vulnerable.

Unless Gov. Hochul and lawmakers cancel the Cuomo carve-out, it will take effect next April.

Thanks to a number of factors, including an unprecedented influx of federal pandemic aid, the Cuomo-era budget deficit is gone. In the meantime, COVID-19 revealed – and exacerbated –  the massive strain on New York’s fragile healthcare system and social safety net. 

Throughout the pandemic, community health centers provided essential services to those in need, especially as state officials pleaded with New Yorkers to avoid emergency rooms and hospitals that were struggling to care for COVID patients. Safety-net facilities played an integral role in keeping vulnerable people safe and healthy, and desperately need support to continue providing care.

If the state has enough money to give a $600 million handout to billionaires and their football teams, it clearly doesn’t need to raid the recurring revenue of safety-net facilities, forcing them to slash services, shut food pantries, cut jobs for essential workers, and close HIV programs.

We already know the results of the carve-out would be dire. California tried something similar, with disastrous results, transferring its Medicaid prescription drug program to a single company: Magellan Health. Now call center volumes are off the hook. Patients are going days, sometimes weeks, without medications, and doctors are issuing dire warnings that it’s only a matter of time before someone dies as a result.

New York is doomed to experience something similar if it fails to heed California’s warning. 

The state maintains that carving out the pharmacy benefit will generate significant savings. But based on how Medicaid is funded in New York, the state would be required to transfer to the federal government more than 70% of the funding derived by dismantling the safety net system, moving resources away from communities in need.

Gov. Hochul has made a lot of promises since she took office. Promises to fix New York’s health care system. Promises to end the systemic racism and inequitable treatment that has faced communities of color for generations.

Her budget did not fully deliver on these promises, but she still has a chance to be a champion for social justice by repealing the Cuomo carve-out before the legislative session ends in June. We urge her to do so immediately.