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PR- 529-09
December 8, 2009


Mayor Michael R. Bloomberg and Governor David A. Paterson today called on Senators Charles Schumer and Kirsten Gillibrand to address provisions of the Senate Patient Protection and Affordable Care Act (PPACA) that would disproportionately burden New York State and New York City. If left unaddressed, those provisions would seriously undermine the important improvements in the Senate legislation and would ultimately weaken New York’s health care delivery system.

Mayor Bloomberg and Governor Paterson raised their concerns in a letter to the State’s U.S. Senators. The full text of the letter is below.


December 8, 2009

Senator Charles Schumer
313 Hart Senate Office Building
Washington, D.C.  20510

Senator Kirsten Gillibrand
478 Russell Senate Office Building
Washington, D.C.  20510

Dear Senator Schumer and Senator Gillibrand,

The four of us have been strong and vigorous supporters of a federal health care reform that will significantly expand health insurance coverage, contain health care costs for businesses and families, and improve the quality of health care delivered to New Yorkers and all Americans. We applaud your efforts to advance federal health reform legislation in the Senate, and we hope to continue to work with you to advance this effort. At the same time, we are compelled to bring to your attention our united, deep concern about provisions of the Senate Patient Protection and Affordable Care Act (PPACA) that would impose significant and disproportionate burdens on New York State and New York City and which, if left unaddressed, would seriously undermine the important improvements otherwise embodied in the Senate legislation and ultimately weaken New York’s health care delivery system.  

Certainly the PPACA contains important reforms that will increase the availability of quality, affordable health insurance coverage. The PPACA provides meaningful financial support for the purchase of health insurance for those with incomes up to 400 percent of the federal poverty level, and it includes a full five-year small business tax credit. The bill also includes a public health insurance option, and it does not diminish reproductive rights. Yet as important as these provisions are, they are overshadowed by the disproportionate fiscal burdens this State, City, and its taxpayers are asked to bear.

We are especially troubled by PPACA’s approach to providing federal support for state Medicaid programs, which penalizes New York for its leadership in expanding Medicaid coverage to low-income adults and threatens to impose disproportionate new burdens on New Yorkers. Today, New York covers parents up to 150 percent of the federal poverty level and single adults up to 100 percent of the federal poverty level (FPL). Only a handful of other states provide this level of coverage.  And, New York has done so despite the fact that it receives the lowest federal matching rate (Federal Medical Assistance Percentage, or “FMAP”) at 50 percent, and despite the current fiscal crisis. In exchange for New York’s early commitment to coverage, PPACA denies New York federal funds extended to nearly every other state in the nation by providing enhanced FMAP to states only to the extent they do not currently cover adults up to 133 percent  of the FPL. Thus, New York is eligible for enhanced federal funding only for the relatively small number of single adults with incomes between 100 percent and 133 percent of the FPL. By contrast, the overwhelming majority of states will receive 100 percent federal funding for all single adults and most parents for three years and 82 to 95 percent thereafter. 

To illustrate the comparative disadvantage:  currently, New York’s regular federal matching percentage is 50 percent while the national average is 57 percent; by contrast, with PPACA’s enhanced Medicaid funding, New York’s overall FMAP will remain essentially flat while the national average FMAP will rise to 65 percent or more.   

And the harm from the Senate PPACA approach is not limited to a loss of enhanced funding that is being afforded to other states; we estimate that the current PPACA Medicaid policies could add close to $1 billion annually in new State Medicaid costs to New York, with serious implications for already strained State and City budgets. To offset these costs would require a 15 percent reduction in payments to providers in every service sector – including hospitals, nursing homes, home health agencies, and community clinics. 

In addition, the current Senate bill would make deep cuts of $800 million to more than $1 billion per year in Medicaid Disproportionate Share Hospital (DSH) payments. New York currently relies on Medicaid DSH to support critical public and safety net hospitals and to reimburse hospitals for substantial levels of uncompensated care. The DSH cuts contemplated in PPACA would be particularly devastating to New York City’s Health and Hospitals Corporation, which is already facing major fiscal challenges. The DSH cuts alone would require very significant service cuts, potentially including closure of all of HHC’s community clinics and cancellation of its home care service. The Senate bill would cut more than twice as much Medicaid DSH as the House health reform bill would, while leaving millions more individuals uninsured. Once again, New York will be disproportionately affected by these DSH cuts, absorbing more than one-sixth of the national total in Medicaid DSH cuts because New York has traditionally invested in supporting its public and not-for-profit safety net hospitals.

It is a truism that New Yorkers will more than pay their share for increasing health coverage around the country. All of the major financing options – from Medicare cuts, to Medicare tax increases, to excise taxes on higher cost health plans – can be expected to extract more revenue/savings from New Yorkers than the per capita national average. And, yet New York will receive far less than the national average in federal relief.

Considering these facts, we urge you to work with us, with your House colleagues, and with your Senate leadership to mitigate the disproportionate impact of the current Senate proposal on New York State and New York City. We look forward to working with you to address these pressing matters and appreciate your leadership on behalf of our State. 


Michael R. Bloomberg                       David A. Paterson


Stu Loeser/ Jason Post   (212) 788-2958

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