Getting Tobacco to Fund Health Care for Have-Nots
Gov. George E. Pataki and the leaders of the State Legislature basked in the spotlight after agreeing this month on an ambitious effort to double New York State's cigarette tax as part of a plan to provide health care coverage to up to 1 million uninsured
But ask any lawmaker or lobbyist who made this plan happen, and fingers point immediately to a behind-the-scenes player who is not even a state official: Dennis Rivera, president of 1199, New York State's largest health care union.
Mr. Rivera, who is often described as the state's most powerful union leader, orchestrated what some lobbyists said was the largest pressure campaign ever in New York State.
His union, working jointly with the Greater New York Hospital Association, a grouping of 175 hospitals and nursing homes, spent $10 million on broadcast advertisements, on mailings and on an unusual telephone program. Union members and their allies sent more than 100,000 postcards to Albany and placed more than 100,000 calls to an 1199-sponsored number, which transferred those calls to the governor's office or to lawmakers so the callers could say the state needed to do more for those without health insurance.
"They spent a significant amount of money, but if you think of the return on their investment, it's stratospheric," said Elliott A. Shaw Jr., chief lobbyist of the Business Council of New York State, the plan's most vocal opponent.
For that $10 million, Mr. Rivera's union, 1199, the National Health and Human Service Employees Union, persuaded Mr. Pataki and legislative leaders to back a $1 billion program aimed at providing coverage to one-third of the 3.2 million New Yorkers without health insurance. The deal would raise hundreds of millions of dollars a year by increasing the cigarette tax by 55 cents a pack, to $1.11, and by using a share of the $450 million a year that the state is to receive from the national lawsuit against tobacco companies. The state will also receive a $300 million federal matching grant.
Mr. Rivera, 48, also persuaded Mr. Pataki to continue a separate program in which $1 billion a year in surcharges would be added to hospital bills to finance medical training and charity care.
Hospitals are often forced to swallow the cost of care for the thousands of patients who show up in their emergency rooms without health insurance. "We've had a growing problem in New York State, and that is the rapid increase in the number of uninsured," Mr. Rivera said. "That has hurt many of our hospitals, and we need to deal dramatically with this problem. This problem hurts the working poor the most."
Mr. Rivera sold his plan in Albany by explaining that, politically speaking, it would be like hitting the trifecta. "This is good for hospitals, it's good for patients and it's good for health care workers," he said. "It's good for everybody."
Not everybody agreed, least of all the state business council, which has 4,000 corporations as members. It opposed the health care package, saying that raising the tobacco tax unfairly picked on one product in a way that might encourage bootlegging. The council also opposed maintaining a large surcharge on hospitals' bills, insisting that it made New York's hospital bills and insurance costs the highest in the nation.
Mr. Rivera knew that to overcome this business opposition and to bring about this plan for the uninsured, he had to bring three stars into alignment: Governor Pataki; Joseph L. Bruno, the State Senate majority leader, a Republican; and Sheldon Silver, the Assembly majority leader, a Democrat.
For months, Mr. Silver had made it clear that the Assembly backed raising the tobacco tax to help the uninsured. Mr. Bruno was less enthusiastic, but Mr. Rivera lined up his support, in part through a barrage of broadcast advertising and letters to lawmakers.
Upstate and downstate, 1199 and the hospital association broadcast ads, one featuring several people walking a tightrope. The narrator said millions of New Yorkers without health insurance were on a high wire, hoping they would not get sick, because if they did, they would face a huge financial fall. Thanks in part to that ad campaign, a polling group hired by Mr. Rivera was soon able to show lawmakers some startling numbers: 82 percent of New Yorkers backed a plan to raise the tobacco tax to help the uninsured.
Mr. Rivera made it known to lawmakers that if they did not go along with efforts to extend health coverage to more of the uninsured, he might run ads attacking them.
Among Albany lawmakers, it is well known how the ads Mr. Rivera ran in 1995 attacking Mr. Pataki's proposals to cut Medicaid spending by $2 billion caused the governor's popularity numbers to plunge. That year, Mr. Pataki all but surrendered to Mr. Rivera and vastly scaled back his planned cuts.
Legislators are especially mindful -- or fearful -- of Mr. Rivera for another reason. His union, part of the Service Employees International Union, has grown to 200,000 members, largely through mergers, up from 105,000 four years ago. Not only that, but he controls a $1.5 million-a-year political action committee.
One day several weeks ago, Mr. Rivera and Mr. Bruno met to discuss Mr. Rivera's initiative and to go horseback riding near his home in Rensselaer County. It is not that Mr. Rivera is part of the horsy set -- he grew up in rural Puerto Rico, where he often rode horses.
In the past, Mr. Bruno ultimately sided with Mr. Rivera's efforts to block Mr. Pataki's proposals to cut Medicaid spending. In exchange, Mr. Rivera pledged that his union, which usually campaigns hard for Democrats, would not campaign against any Republican incumbents in the Senate. Mr. Rivera declined in an interview to say whether he made a similar pledge about future Senate campaigns.
Several lawmakers said Mr. Pataki agreed to the deal because he was tired of being the victim of Mr. Rivera's broadcast assaults, including ones earlier this year about Mr. Pataki's latest effort to cut Medicaid spending. The governor largely gave up that effort after those ads..
In the interview, Mr. Rivera said Mr. Pataki was so eager to make peace with 1199 that the governor promised not to try to cut Medicaid spending in his remaining three years in office.
Arguably the most unusual aspect of Mr. Rivera's lobbying campaign was that it was made possible by the Wall Street boom, which had put more than ample money in the union's pension plan through its investments. In its latest contract, the union allowed hospitals to forgo pension contributions for several months, and millions of dollars that would have gone to those contributions went instead into 1199's and the hospitals' Planning and Placement Fund.
That fund promotes ways to safeguard workers' jobs and the hospitals' financial health, and it was money from that fund that financed the $10 million lobbying campaign.
"We were completely outmatched," Mr. Shaw. "We were never able to match someone who brings a laser-beam focus the way he does."