Budgeting in New York State requires a sensitive balancing act; balancing the needs of providing for our most vulnerable with the burdens placed on our struggling taxpayers. Budgeting is a careful act of prudence and compassion. It is often monetary struggles that elicit the most passionate emotions in state government. After all, some people rely on government for their most basic needs, especially in terms of the health care provided by New York’s Medicaid program.
As our local counties struggle to keep property taxes in check, there continues to be much discussion about the impact of Medicaid costs on them. Many people in government believe we have reached a critical state in the Medicaid debate, and that without dramatic changes the system could be seriously compromised. It is, therefore, important for the public to understand how we got where we are and where we may be heading in terms of Medicaid costs.
At the inception of New York’s Medicaid program in 1966, recipients consisted of our neediest citizens, those on welfare assistance. Over the years, we’ve adjusted the program to accommodate the working poor. Currently, three out of four Medicaid recipients are of working poor status who are ineligible for welfare. Additionally, New York has become one of only seven states to offer Medicaid or comparable services to poor, childless adults. New York’s Medicaid system has grown to include programs like Child Health Plus and Family Health Plus. It pays for the long-term care of our indigent elderly, in-home personal care, clinical services, pharmaceutical assistance and outpatient and emergency services. It’s easy to see how it has grown to one of the most extensive and costly Medicaid programs in the nation.
Generosity, however, comes at a steep price. New York pays the highest Medicaid bill in the nation, nearly $54 billion was spent in 2010, over $1 billion per week. Medicaid costs in this state are larger than those of Texas and Florida combined, and we easily outpace California’s spending even though they have many more recipients than we do. Between 2000 and 2009, Medicaid spending grew by 195 percent. Medicaid spending in the state accounts for over one-third of all state spending, which creates a significant financial burden on our taxpayers.
Bolstered by federal matching dollars, New York’s system grew from a humble assistance program to the “Cadillac” of Medicaid programs that exists today. New York is reimbursed by the federal government at the lowest rate of 50 percent of the cost, with 25 percent paid by the state, and 25 percent paid by county governments. New York State continues to mandate a large, all-encompassing and generous program, while our county governments struggle to keep up with the costs. This has resulted in steep increases in property taxes to pay for these programs. The paradox of this situation is that with a bad economy the need for these services rose as government revenues fell, making the state’s Medicaid program more precious.
Further compounding the issue are outside influences, such as New York’s out-of-control medical malpractice system, preventable disease and substance abuse issues and Medicaid waste, fraud and abuse. With all the financial challenges facing our state, is it possible to strike a mutually beneficial balance between Medicaid’s costs and the services it provides?
In his Executive Budget proposal, Gov. Cuomo called for a gradually implemented cap on increased Medicaid costs and an eventual consolidation of administrative duties from the county to the state. While this is certainly welcome news to many cash-strapped county governments, the move doesn’t address the underlying problems in Medicaid cost growth – and let’s be honest – without cost control we’re all going to pay for it one way or another.
Medicaid has become a seriously complex matter and deserves further discussion. Next week, I discuss ways that New York can help keep this important program affordable to taxpayers. If you have any additional questions or ideas about Medicaid’s sustainability in New York, please e-mail me at butlerm@assembly.state.ny.us or call my Herkimer office at (315) 866-1632 or my Johnstown office at (518) 762-6486.