Situation Report | February 22, 2021
Federal negotiations over a $1.9 trillion aid package continue to take shape, creating several major angles of impact for home and community-based providers.
Aid to New York and its Ripple Effect on the State Budget, Medicaid, and Proposed Cuts
As extensively reported, New York’s state budget is unusually staked on the outcome of the federal stimulus negotiations in Congress.
To start, the Governor’s proposed budget has assumed $6 billion in federal aid coming to New York; yet his proposal still nevertheless would cut health care providers in an effort to close the remainder of a gap that his administration pegs at $15 billion.
The budget includes a 50-percent cut in home care workforce recruitment and-retention funds. It also includes the continuation of 1.5-percent across-the-board reductions that would nearly double to 2.5 percent through an additional 1 percent cut going forward into the new state fiscal year.
In a press release this past week, HCA announced the findings of our annual report on home care finances and operations which “make a clear and convincing case that further cuts to home and community-based services are unsustainable.” We called on the Governor and Legislature to restore funds to providers, assisted by federal aid. Please read our press release as well as press coverage here in Home Health Care News, McKnight’s Long Term Care, and two ABC news affiliates (in Albany and Buffalo).
Various reports — from members of Congress and other insiders — suggest that New York could receive approximately $12 billion under the current House plan, which is approximately double the Governor’s original projection with its presumption of cuts and tax increases.
While that aid amount may sound promising, it is simply just a projection based on the House bill. Negotiations could move it off mark. A final outcome depends entirely on threshold votes by both houses of Congress, as well as decisions by the Governor and State Legislature in applying those funds toward the state’s deficit.
Also under consideration in the federal package is an additional 10 percent to the federal share of the Federal Medical Assistance Percentage (FMAP) through the end of the public health emergency. It is unclear at this point how such funds would affect the budget outlook in New York.
One of the most contentious elements of the package is an increase in the federal minimum wage to $15 per hour.
As previously reported, HCA joined a letter led by the National Association for Home Care and Hospice (NAHC) urging Congress to increase payment rates from federally funded programs in conjunction with any increase to the minimum wage as a means to offset agencies’ increased labor cost. The letter also recommends that a tax credit or subsidy be created for consumers so that they are positioned to maintain the level of care they need.
A big question is whether the minimum wage proposal could be taken up through a process known as “reconciliation,” which only requires a simple majority and avoids a filibuster threat that otherwise requires a 60-vote super-majority.
Other major proposals in the federal negotiations include another round of stimulus checks, the extension of expanded weekly unemployment benefits, dozens of public assistance provisions, targeted aid to local county and city governments, as well as funds for vaccines, testing and tracing, school reopening, and much more.
HCA and our government-relations firm, Envision Strategy, are in continual contact with New York’s Congressional on HCA’s priorities and the importance of federal aid for the sustainability of home and community-based services. We will immediately inform the membership of any major developments in the negotiations.