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April 11, 2005

Report: Powerful interests in Albany block meaningful Medicaid reform

Although most New Yorkers seem to agree that Medicaid costs too much in New York and doesn’t deliver a commensurately high level of care, there are powerful political interests in Albany blocking meaningful reforms, according to the latest installment of the Public Policy Institute’s series Medicaid Watch ’05.

The ninth installment of the series suggested that Albany has little incentive to tackle the Medicaid problem in large part because elected officials know the interest groups that benefit from the status quo will paint any cost-saving reforms as a vicious attack on the needy.

“Over the past eight years, the high and rising cost of Medicaid has benefited one particular interest group more than any other: the health-care workers union, Local 1199 SEIU,” the report said.

The budget adopted by the Legislature this year continues the practice of granting “special favors” to the union, the report added. “This time, it’s an $80 million fund to raise union members’ salaries in Upstate nursing homes.”

The union uses millions of dues dollars to lobby, make political contributions and buy TV and radio campaigns aimed at pressuring Albany not to reform Medicaid, the report said. “So when legislators send even more taxpayer millions to the union, they give union President Dennis Rivera even more power to block reform.”

The swelling Medicaid budget results not only in tax increases, but in a shift of resources away from other areas such as education and transportation. “Over the past five years, state-funds spending on Medicaid is up $4.4 billion,” the report said. “That compares to $2.6 billion for the area with the second biggest increase, aid to public schools.”

The Public Policy Institute is publishing Medicaid Watch '05 to document the case for reforms that reduce overall costs imposed on New York's taxpayers, businesses, farmers, and county governments. All reports in the series are at www.ppinys.org.

These reports were researched and written by Robert Ward, the Institute's director of research. To interview him about Medicaid spending, telephone 518/465-7511, ext. 271.