Cuomo’s office has denied the allegations, claiming the election-year fund was created to sustain New York’s commitment to ensuring everyone has access to health care.
According to the analysis conducted by the Empire Center for Public Policy, the issue surrounds a controversial agreement between the state of New York, health insurance companies, and Catholic bishops.
Fidelis Care is one of New York State’s top providers of health insurance to poor and low-income residents. In September 2017, Centene Corp. agreed to purchase Fidelis for $3.75 billion, which reportedly included the funds being diverted to a charitable foundation administered by New York’s Catholic bishops.
Then Cuomo’s office stepped in, and things got very shady.
Cuomo is accused of abusing the power of his office to extract rent from the sale between Fidelis Care and Centene. His office reportedly claimed that because Fidelis earned a majority of its revenue from Medicare, Medicaid and Obamacare plans — which are programs based in New York — the state was legally allowed to collect $3 billion worth of the proceeds.
Cuomo’s office said it was an effective tax rate of eighty percent on what the company had earned in the state.
To date, Cuomo’s office is not outright denying the claims, but rather pushing back against the categorization that the governor’s office broke the law acted unethically.
An official in Cuomo’s office said Fidelis existed as a non-profit for years, claiming that the company moved to sell its assets to a private company. Cuomo’s office claims the state, on behalf of the public, was forced to ensure the money wasn’t abused by the non-profit company.
Amid pressure from Cuomo’s office, Fidelis and Centene agreed to give up $2 billion over the next four years, including $1.35 billion this year as part of the deal.
Now, the Catholic bishops’ charitable foundation is only left with $3.2 billion.
In a press release from Cuomo’s office, the deal was referred to as a “Health Care Shortfall Fund,” which describes it as “a fund to ensure the continued availability and expansion of funding for quality health services to New York State residents and to mitigate risks associated with the loss of Federal funds.”
So Cuomo is using legalese and PR speak to water down the shady deal and why his office exerted its power to reallocate funds anywhere the governor chooses. Cuomo will also be able to reallocate health care funds wherever he wants as part of the deal.
His office claimed it had the authority to transfer billions in funds from the deal into an election-year slush fund operated by his office.
It’s unclear what laws may have specifically have been broken, but this shady deal should be investigated much further.