Lawmakers Are Seeking Transparency on Health Care Tax

Some lawmakers are challenging the Cuomo administration’s push for a $69 million annual tax to fund the state’s health exchange, wondering how the state spends the more than $5 billion in annual health care related taxes it already collects.
The Republican-led State Senate eliminated the proposed tax from its one-house budget.
Cuomo set up the exchange through an executive order after the Senate refused to consider creating it. The order Cuomo issued dictated that the exchange was to become self-sustaining by this coming fiscal year.But lawmakers are questioning why the tax, which would be funded through an increase in the Health Care Reform Act assessments paid by insurers, is necessary and wondering whether the money to fund the exchange can be found within the $5.5 billion the HCRA tax already generates each year.

That tax has recently come under new scrutiny with the arrest of former Assembly speaker Sheldon Silver, who allegedly used money from a slush pool funded with the tax money to make grants to a doctor who led lucrative clients to his law firm. The tax, originally intended to fund just graduate medical education and charity care, has ballooned over time into a general purpose fund that is used to prop up the state’s budget and trigger additional federal Medicaid money.

Under the HCRA law, details of how the money is collected and from whom, as well as how it is disbursed, should be easy to obtain. The details are supposed to be disseminated in quarterly reports written by Excellus Blue Cross Blue Shield, the company the state hired to manage all the HCRA money under a no-bid contract that pays Excellus $4.5 million a year.

State law requires Excellus to submit directly to the temporary president of the senate and the speaker of the assembly quarterly reports on the collection, pooling and distribution of funds in the HCRA Pool. The pool administrator is also supposed to submit reports detailing HCRA spending to the state’s comptroller. But lawmakers have said that the pool administrator hasn’t delivered any such reports for several years.

When lawmakers asked for those reports as part of this year’s budget negotiations, Cuomo administration officials gave them some numbers, a spokeswoman for Senate health committee chair Kemp Hannon said.

Reached Friday for comment, a spokesman for the Office of Pool Administration said he had no idea what the reports were. That’s something the Department of Health would handle, he said. Asked why the health department and not Excellus, would handle the reports, as required by law, the spokesman said, or one thing I don’t know what it is, and I don’t know who would be handling it. It’s something I don’t even know about.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary