Upstate New York gets $2.3 billion gift in Republican health care bill

Price: Health care plan won't leave people out
Price: Health care plan won't leave people out

The House Republicans' health care bill now provides an unusual sweetheart deal for upstate New York and Long Island.

In an effort to woo Republican lawmakers in the state, House leaders have agreed to an amendment that would block the federal government from reimbursing state Medicaid funds raised by local governments. The provision is worded so that it only applies to New York State.

In New York, counties outside of New York City send $2.3 billion to the state to help pay for Medicaid. Upstate officials cheered the GOP's measure, saying it would allow them to lower county property taxes for their residents. Medicaid spending accounts for an average of 44.3% of the county property tax levied in New York, state lawmakers argue.

"This is a huge win for our constituents," said New York Representative Chris Collins, who pushed for the provision, which would take effect in 2020. "Year after year, Albany's leadership relies on counties to foot the bill for New York State's out-of-control Medicaid costs. Enough is enough. This amendment will stop Albany from forcing its unfunded mandate down the throats of taxpayers, and help counties lower the property tax burden on hardworking families."

Related: White House says more changes 'possible' to health care bill

But state officials and hospital executives say it would blow a huge hole in the state's Medicaid budget and leave many New Yorkers without coverage.

"There is no fairy that is going to float down and hand over $2.3 billion to make up the shortfall that the counties lack," said New York Governor Andrew Cuomo in a press conference Tuesday. "...that means less people are going to get health care assistance. That means more hospitals, more nursing homes are going to close. That's what that means."

New York has one of the nation's more generous Medicaid programs -- it provided benefits to low-income adults even before the Affordable Care Act was passed -- and now covers roughly 6.4 million people (including Children's Health Insurance Program). That's about one-third of the state's population.

It spent just under $60 billion a year on Medicaid in fiscal 2015, with just over half of that coming from the federal government.

Some 18 states require their counties to contribute to Medicaid, but New York State demands the most by far, according to the National Association of Counties. The Empire State's counties send a total of $7 billion to help defer the costs. The bulk comes from New York City, which is not included in the deal.

Related: What's changing in the Republican health care bill?

Overall, the state's counties contribute about 13% of spending. It had been as high as 25% in the past.

In addition to the provision for upstate New York and Long Island, the House GOP bill would curtail federal support for health care in all states. In New York, the combined hit would total nearly $7 billion, Cuomo said. An estimated 2.7 million New Yorkers could lose coverage, the governor said, citing Congressional Budget Office statistics.

Upstate New York lawmakers, however, say that the state government can do more to cut costs from its Medicaid program.

"It's time for Albany to reform Medicaid spending," said Representative John Faso, referring to the state capital.

CNN's Jessica Rajendra contributed to this story.

Personal Finance


CNNMoney Sponsors