Medicaid Reform Letter

February 2, 2005

Dear Editor:

While your Jan. 27 editorial made some valid points regarding Medicaid costs in this state, one significant contribution to the problem was omitted: New York is dead last in federal Medicaid funding. Combine that with the unwillingness of the governor to call on his friends in Washington to correct that injustice, and it’s clear that the lack of adequate federal funding hurts New York considerably.

Some states are reimbursed between 75 and 80 percent of their Medicaid costs, but New York gets just 50 percent. That leaves the state, local governments and, ultimately, property-taxpayers to pay for the rest. Incredibly, a 1 percent increase in federal Medicaid funding would provide our cash-strapped state with $600 million the exact amount New York’s county executives say they need to cover increased Medicaid costs.

The governor has talked repeatedly about lowering New York’s tax burden, but refuses to turn to the president who he worked so hard to get re-elected and ask him to level the playing field. Until the federal government provides New York with its fair share of funding, the challenge of paying the Medicaid bill each year will continue.

For now, the most responsible action we can take to protect property-taxpayers is a 100 percent state takeover of New York’s Medicaid costs. In 1994, the Assembly supported a two-year plan for the state to assume a larger portion of Medicaid costs from counties targeting two of the fastest growing components: long-term care and managed-care costs. In 1995, as one of his first actions concerning Medicaid, the governor eliminated the second phase of the plan. As a result, since 1995, local governments have lost an estimated $754 million in Medicaid long-term and managed-care savings.

Last year, the Assembly made progress toward that goal by enacting a plan to have the state pick up the total cost of the Family Health Plus program saving property-taxpayers approximately $200 million this year alone. While the governor’s proposal to cap Medicaid growth is a welcome initiative, it won’t solve the problem. I again urge the governor to lobby for more federal Medicaid funding that would truly be a step in the right direction.

Barbara Lifton