SEIU, Hospital Lobby Ready Clout With NY Medicaid Fight Looming

An alliance between a powerful Service Employees International Union local and the New York hospital lobby has continued to drive Medicaid funding in the Empire State and faces a new test with a growing budget hole next year.

The fiscal debate comes as state lawmakers can’t ignore the political influence of 1199SEIU as they grapple with a $4.3 billion state budget deficit that will force likely cuts in the 2024 session.

The 450,000-member union local is the largest labor group in New York with millions of dollars to spend on campaign contributions, lobbying, and public relations. Its tactics included leveraging $86,945 worth of catering to feed an army of activists in Albany this spring as they successfully pressured Gov. Kathy Hochul (D) to support $1.4 billion in new funding for hospitals, Medicaid rate increases, and pay raises for health care workers in a final budget deal.

Elected leaders “can’t really make real decisions” on big policy proposals without involving 1199 “because of how powerful they are,” said Camille Rivera, a political strategist who has previously worked with the group. A “symbiotic” relationship with the Greater New York Hospital Association (GNYHA) extends the union’s heft even more, she said.

That hospital alliance is just one example that has helped make the local a dominant voice on the progressive left on issues as varied as Medicaid, taxes, and criminal justice reforms. Such an unrivaled role in New York politics is one more sign of the sweeping influence of SEIU in union-friendly states across the country.

SEIU scored big legislative wins in California—where it has 700,000 members—this year that include securing a minimum wage increase for fast-food and health-care workers. California Gov. Gavin Newsom (D) also appointed Laphonza Butler, a former president of SEIU California, to fill a U.S. Senate seat previously held by Dianne Feinstein (D).

Union affiliates also made gains in smaller states like Minnesota where lawmakers approved a worker-friendly contract after organized labor helped Democrats win full majorities in both chambers of the state Legislature last year.

The labor-management partnership between the labor group and the hospital industry in New York, however, is unique in its political reach and boldness, said former New York Gov. David Paterson (D) in an interview while recalling budget battles from more than a decade ago.

“I’m trying to negotiate with everybody and 1199 and GNYHA are like they never heard there was a budget gap,” said Paterson. “They must actually have meetings before they come up because they always manage to say the same thing.”

‘Interesting Phenomenon’

The hospital association and 1199SEIU forged their partnership more than 30 years ago as the union began eyeing a greater role in state politics under then-president Dennis Rivera. This included jointly founding the Healthcare Education Project devoted to promoting their mutual interests in increased state spending on issues like Medicaid, the federal-state health insurance program for low-income individuals.

“Working together, we can help solve fundamental health-care issues facing the public and us as a subset in the hospital community,” Kenneth Raske, president of the hospital association, said of the “interesting phenomenon” of organized labor teaming up with hospital leaders to form one of the most formidable political one-two punches in Albany.

The alliance’s Healthcare Education Project ranked as the top lobbying spender in Albany last year with $5.5 million in total expenses, state records show. In second place was 1199SEIU with $2.1 million in expenditures while the hospital association ranked fifth with $741,000 in total spending.

The hospital industry and the local, which has become a powerhouse on the political left in recent years through its lobbying on issues like housing, criminal justice reforms, and single-payer health care, have also each been key sources of contributions for politicians from both parties.

The hospital association this year has given at least $320,000 to campaign accounts tied to the Democratic majorities and Republican minorities in the legislature. Meanwhile, 1199SEIU gave roughly $2.2 million last year to help Democrats like Hochul, who won narrowly won a full term in office in the closest gubernatorial race in two decades.

Union leaders invoked their electoral support while pushing Hochul during budget negotiations to back the $1.4 billion in new funding for hospitals, increased Medicaid reimbursement rates, and a higher minimum wage.

“We worked very hard to get you elected because we believed in you,” George Gresham, 1199SEIU president said in late March at an Albany rally. “But it’s time for us to tell you, with love, we don’t work for you—you work for us.”

Money Well Spent?

A state budget update released by the governor’s office on Oct. 30 credits “historic growth” in school aid and Medicaid with driving projected increases in state spending under the $229 billion spending plan approved in May.

State Medicaid spending is on track to increase by $2.9 billion in the fiscal year beginning April 1, to $30.7 billion while school funding could increase by $1.3 billion to $35.7 billion.

“When you have the two biggest programs in your budget growing that much,” said Patrick Oreki of fiscal watchdog Citizens Budget Commission, “it makes it harder to manage the budget overall.”

Raske argued that New York hospitals, which receive about a third of state Medicaid dollars, are not the problem when it comes to rising state health-care costs. The state, for example, spends an estimated $4 billion to provide in-home care to Medicaid recipients. Some funding streams for hospitals, meanwhile, have remained relatively flat in recent years, said Raske. “Choices have been made in the past, by government, not to pay hospitals adequately, as it relates to inflation,” he said.

Amid the budget deficit, the hospitals and the local are amenable to work with state officials to identify potential budget savings in Medicaid similar to past reform efforts as long as core funding streams continue to flow towards hospitals and their workers, according to union officials.

“We got to preserve the core services that Medicaid recipients need and make sure that the providers who provide those services can survive financially,” said Helen Schaub, state policy and legislative director at 1199SEIU. “But there are other ways to save money and particularly focusing on the companies that are taking money out of the system.”

New York spends more money on Medicaid—$92.3 billion in the previous fiscal year once federal and local funding is included—than any other state than California, which has twice as many people.

Nearly half of New York’s 19.7 million residents are enrolled in the New York state Medicaid program, according to a March report by the Office of the State Comptroller.

That spending amounts to a cost of $4,240 per resident—the highest in the nation, according to an October analysis by the Empire Center for Public Policy, a conservative think tank.

Such costs reflect the growing importance of Medicaid dollars to the bottom lines of the union local and the hospital industry as much, if not more, than expanding access to health care, said Bill Hammond, a senior fellow at the group.

“Theoretically, it’s a health plan for low-income or the disabled,” said Hammond. “As a practical matter, it’s a source of money for the health-care industry.”