Copyright 1999 The Buffalo News
The Buffalo News
December 18, 1999, Saturday, FINAL EDITION
SECTION: NEWS, Pg. 1A
LENGTH: 1308 words
HEADLINE:
STATE NAILS DOWN HEALTH-CARE REFORM
BYLINE: TOM PRECIOUS; News Albany Bureau
DATELINE: ALBANY
BODY:
Nearly 1 million uninsured New Yorkers will be
eligible for health coverage and ailing hospitals are in line
for millions in financial assistance under a landmark agreement reached Friday
by Gov. George E. Pataki and legislative leaders.
The
Health Care Reform Act is being funded with nearly $ 1.5
billion in proceeds from last year's settlement between the state and tobacco
companies and by doubling the state's tax on a pack of cigarettes to $ 1.11. New
York smokers now will pay the highest taxes in the nation.
The
agreement, which came after weeks of contentious negotiations for a
health-care financing program due to expire in two weeks, also
includes promises not to cut Medicaid programs over the next three years and
cuts the costs by $ 110 million for businesses that provide employee
health insurance.
The program also will help small
businesses and those buying their own, high-cost insurance to enroll in a
state-subsidized health insurance program, and it creates an $
82 million fund for financially ailing hospitals in urban and rural areas. While
hospitals generally rejoiced over the deal's financial protections, fiscal
conservatives and some corporate interests, led by the tobacco industry,
condemned the $ 9 billion program as a holiday spending spree that could drive
up business costs and property taxes. Anti-smoking groups, meanwhile, praised
the agreement's tax increase, which they say will financially dissuade at least
250,000 people from smoking; they criticized as short-sighted compared to other
states its provision to spend $ 37 million a year -- one-third what federal
health officials say is needed -- on tobacco control programs.
Health
groups in Western New York, worried about earlier plans to cut aid to already
ailing hospitals, breathed easier.
"It's a very positive impact," said
William Pike, president of the Western New York Health Care Council, an
eight-county group of hospitals and nursing homes. While he would not say the
deal will reverse the losses by hospitals in the region -- which totaled $ 86
million last year -- the new program, "will create stability for our future."
Hospitals were particularly concerned about threatened cuts -- which did
not materialize -- to facilities that train physicians, which includes most of
the big hospitals in the Buffalo area. "Those programs are very critical to our
local economy," added Pike, who said the teaching programs bring grants and a
high quality of care to local hospitals. The deal also preserves, and in some
case boosts, funding for care hospitals provide for patients who either can't or
refuse to pay.
The programs for teaching doctors and paying for indigent
and bad debt care is funded by an 8.18 percent surcharge on hospital bills.
Business groups had fought vigorously to lower that surcharge. In Friday's deal
involving Pataki; Assembly Speaker Sheldon Silver, D-Manhattan; and Senate
Majority Leader Joseph L. Bruno, R-Brunswick, the surcharges were left intact.
Eliminated was about $ 50 million in surcharges now slapped onto all
routine tests at hospital and private labs.
Backers of the plan, which
will be approved by rank-and-file lawmakers by January, if not sooner, said its
centerpiece is the help given to uninsured New Yorkers, about 3 million people
statewide. Officials, however, insist the number of those hit most hard is
closer to 1 million. Officials estimate about 500,000 will enroll in one of the
state-subsidized programs.
The plan calls for covering the uninsured
through private programs, instead of steering them to Medicaid. Companies with
fewer than 50 employees, workers whose jobs don't include insurance and those
that pay their own coverage costs will be able to join a state-subsidized
program.
Critics, however, worry that some companies will, given the new
government incentives, simply end their insurance benefits to push workers onto
the state's plan.
The deal also includes establishing Family Health
Plus, which builds on a program now available for uninsured children. It will be
available for parents with incomes 150 percent below the poverty line, or about
$ 25,000 for a family of four.
"It's a great day for health care
workers, institutions, patients and particularly the uninsured in New York
State," said Dennis Rivera, president of Local 1199 of the Service Employees
International Union, a New York City-based union that has 7,000 members in the
Buffalo area. In an unusual move for a trade group, Rivera, whose union is a
major political donor in Albany, was at the table with Pataki, Silver and Bruno
crafting the deal.
But the state Business Council, which wanted major
cost cuts in the program, called the deal "a mixed blessing for New Yorkers."
Besides opposing the cigarette tax increase, the group worried whether about
costs ballooning in future years.
The cigarette tax increase, for
certain, is the program's most controversial element. New York, once a leader in
anti-smoking efforts, has been surpassed by other states with far more
comprehensive programs. Once the nation's highest when enacted in 1993, the
present 56 cents a pack tax has since been surpassed by 15 other states. The new
$ 1.11 state tax will now lead the nation; Alaska and Hawaii both charge $ 1 a
pack.
Philip Morris, the world's biggest tobacco company, said the tax
hike will result in 2,400 lost jobs in the cigarette industry because of
declining sales, which they estimated would total 226 million packs a year
because of the new tax.
They also warned that bootlegging and sales on
Indian reservations, where no state taxes are paid, will skyrocket, cutting into
sales of convenience stores, particularly near border locations.
"We
think this is an unfair proposal that singles out adults who choose to smoke to
pay for a broad-based, statewide proposal that is really everyone's
responsibility," said Thomas Ryan, a company spokesman. Revelations this year
that Philip Morris failed to report wining and dining more than 100 lawmakers
paved the political way for the tax hike agreement by Pataki and Bruno, who have
long opposed hitting the industry with higher levies.
Anti-smoking
groups, meanwhile, were mixed in their assessment. Blair Horner, a lobbyist for
the New York Public Interest Research Group, called the 55 cents tax increase
"the single biggest step the state has ever taken against tobacco."
But
Horner and others said the plan falls short by not adequately funding a
comprehensive program to keep teen-agers from starting to smoke and helping
current adult smokers to quit. They say states like California, Florida and
Massachusetts spend much more and are seeing smoking rates fall.
"It's
just simply not going to be able to go up against an extremely powerful industry
that is just brilliant at marketing," said Donald Distasio, chief operating
officer of the American Cancer Society. Highlights of the state plan Who is
helped? * Uninsured residents, 1 million will be eligible for health coverage *
Hospitals, which won't have to cover the costsof caring for for as many unisured
patients * Some businesses, who can tap into subsidized insurance program for
workers * Smokers, who will see increased fundiong to help them quit * Future
doctors, many of whom then head out of state for jobs, who will have their state
funded training programs continued. * Consumers, who won't be charged an
additional 8 percent in taxes when they go to a lab for blood tests, pap smears
and other routine tests Where will the money come from? * Smokers, by far, who
will see a 55 cents a pack tax hike * Businesses and counsumers, who won't see
hospital surcharges drop as they'd wanted * Tobacco companies, which will be
paying nearly $ 1.5 billion for the program over three years out of last year's
historic lawsuit settlement
GRAPHIC: Associated Press;
Assembly Speaker Sheldon Silver, left, Gov. George E. Pataki and State Senate
Majority Leader Joseph L. Bruno announce the deal they crafted. SIDEBAR ATTACHED
LOAD-DATE: January 26, 2000 
