The Buffalo Buyout: why the new GOP health bill includes a sweet deal for New York

In 2009, Democrats scrambling to pass Obamacare carved out a special exemption from new Medicaid payments for Nebraska. The exemption was designed entirely to win over the vote of the state’s Democratic senator, Ben Nelson. Conservatives mocked the giveaway as the “Cornhusker Kickback.”

Now trying to pass a health care bill of their own, Republicans have created their own special rule to win over moderates in the GOP’s New York delegation. Critics have already nicknamed it the “Buffalo Buyout,” the “Tammany Haul,” and the “Upstate Shakedown.”

Here’s the background: Politicians in rural New York have long complained that their state’s Medicaid expansion inflicts a heavy tax burden on local counties, driving up local property taxes. The Huffington Post reports that counties are forced to pay about $7 billion of the state’s $27 billion Medicaid liability.

Members of both parties in upstate New York have long criticized Gov. Andrew Cuomo (D-NY) for pushing this “unfunded mandate” onto their tax rolls. They say that the state should instead pay for the Medicaid expansion, which can eat up as much as 70 percent of the local property tax revenue in some counties.

As a result, Rep. Chris Collins (R-NY) has led the charge during the debate of AHCA to force the state to pay for the expansion entirely, by changing the rules surrounding Medicaid. Notably, according to the Huffington Post, the amendment would only apply to counties with fewer than 5 million people — so the Democrats in New York City would have to keep paying.

The special carve-out is likely not just to win the support of Collins, who had expressed reluctance to vote for Paul Ryan’s American Health Care Act, but also of Rep. Claudia Tenney (R-NY), Rep. Elise Stefanik (R-NY), and Rep. John Faso (R-NY). The one upstate Republican likely to remain opposed is Rep. John Katko (R-NY), who comes from a swing district centered around Syracuse.

Reports the New York Times:

“I suggested we put this in,” Mr. Collins said, “and the question that came back was, ‘If we do it, can we get the New York votes?’” He said aside from one member, “the rest of us, kind of as a pack, went to leadership and said, ‘Yeah, you get this in here, you’ve got our votes.’” …

William Cherry, the Schoharie County treasurer, said upstate counties would be able to make a significant reduction to their property taxes if they did not have to shoulder part of the cost of the state’s Medicaid program.

“This would be a huge step and a great benefit to taxpayers,” said Mr. Cherry, a Republican who is president of the New York State Association of Counties.

In practice, removing the Medicaid tax burden from the county would mean either that state taxpayers would have to fork over more money, other state programs would see funding cuts, or some New York residents would lose access to health insurance.

“The more we learn about the repeal and replacement for the Affordable Care Act, the sicker New York gets,” Cuomo said in a statement Monday night.