Unionized home-care workers and advocates packed into Albany on Monday, pressing lawmakers to pull private insurers out of New York’s Medicaid home-care payment system. At the center of the fight is the Home Care Savings and Reinvestment Act, sponsored by State Senate Health Chair Gustavo Rivera and Assembly Health Chair Amy Paulin, which would shift most home-care payments and care coordination back under state control and pay providers through a managed fee-for-service model.
Supporters argue that the current managed-care setup siphons taxpayer dollars into plan overhead and profits instead of paying aides and funding services. They say the change could free up billions of dollars to boost wages and expand hours for home-care workers. Industry groups counter that reworking how money flows through the system could disrupt care for hundreds of thousands of New Yorkers and load new costs onto the state budget. With budget negotiations underway, the clash has become a high-stakes line item in Albany.
As reported by Crain's New York Business, 1199SEIU staged a rally calling on legislators to pass the Home Care Savings and Reinvestment Act and channel any savings directly into care and worker pay. Senator Gustavo Rivera told the outlet, “Privatizing health care has not saved our state money or improved care for New Yorkers. In fact, it has had the opposite effect.” The bill was first introduced in December 2023, and advocates are now pushing to get its language folded into this spring’s budget deal.
Supporters: Cut the Middlemen, Reinvest in Care
Backers, including 1199SEIU and the Care Not Profit coalition, say managed long-term care plans are draining public dollars through administrative costs and profits. They want to end most partial-capitation plans and move those enrollees into a state-run managed fee-for-service system, while keeping fully capitated models like PACE intact.
Estimates in coalition analyses and 1199SEIU materials put the potential savings at roughly $3 billion to $3.5 billion a year. Advocates say that money could be plowed back into higher wages, more hours for aides, and additional supports for consumers who rely on home-care services.
Industry: Change Could Raise Costs, Threaten Access
Insurers and some provider groups see the bill very differently. They argue that dismantling managed long-term care plans would be costly and highly disruptive for enrollees. In a December statement, the president of the New York Health Plan Association warned the proposal could “take away the care that more than 300,000 low-income individuals ... have come to depend on” and called the bill’s fiscal assumptions “seriously flawed.”
The New York Health Plan Association and other industry representatives have told policymakers that the transition could add several billion dollars in state costs each year. That projection has become one of the central flashpoints in the debate, putting dueling spreadsheets at the heart of a very human fight over who gets care and who gets paid.
Audits Fuel the Push for Change
Advocates for the bill lean heavily on a series of state audits that found major oversight problems in the managed long-term care program. An August 2022 audit by the state comptroller found about $2.8 billion in premium payments that went to plans providing little or no services, along with roughly $701 million paid on behalf of people who were no longer eligible for coverage.
The Office of the State Comptroller and advocacy groups such as Medicaid Matters have repeatedly highlighted those findings in testimony, arguing that the state should claw back more direct control over the program and tighten accountability for how taxpayer dollars are spent.
What Lawmakers Face
The bill’s lead sponsors, Senator Gustavo Rivera and Assemblymember Amy Paulin, are pushing to wrap the measure into this year’s budget talks, rather than leave it for a separate policy fight later. Supporters have submitted detailed financial and operational arguments in budget testimony, including briefs from 1199SEIU and other coalition members laying out how the switch could work.
Health plans, for their part, have provided their own fiscal analyses warning that the state is underestimating the costs of unwinding the current managed-care system. Lawmakers now have to sort through conflicting projections as they hammer out appropriations and any implementation language that would govern a transition, including timelines and oversight rules.
Why It Matters Locally
For New Yorkers who rely on Medicaid-funded home care, the fight in Albany is not abstract. Advocates say redirecting money away from private plans and into the direct-care workforce would translate into higher pay and more hours for home-care aides, which they argue is essential to stabilizing a system that many families already find stretched thin.
Insurers and some providers warn that upending the current structure could bring short-term chaos, especially around care coordination, if the state moves too fast. With roughly 280,000 to 300,000 people enrolled in managed long-term care-type programs statewide, any major shift will ripple from the Bronx to Buffalo.
As budget talks move forward, the dispute has taken on a sharply political edge. Whether lawmakers side more with spreadsheets from labor-backed coalitions or from health plans will help decide not only who manages the money, but how home-care services are delivered across New York in the years ahead.
