Fitzpatrick and Assembly Minority Unveil Plan for State Takeover of All Medicaid Costs

Proposal would relieve local governments of Medicaid costs within next five years
June 1, 2004

State Assemblyman Michael Fitzpatrick (R,C-Smithtown) joined more than 40 of his Assembly Minority colleagues to announce a proposal for a complete state takeover of local Medicaid costs within five years. The plan uses a combination of tax-restructuring and cost-containment measures.

"Local governments and property taxpayers across the state find themselves funding the ever increasing, state-mandated tax burden," said Assemblyman Fitzpatrick. "It is not fair to continually place the burden for these runaway costs on the backs of property taxpayers. Under the provisions of our plan, counties would not have to raise property taxes because of Medicaid."

The centerpiece of the plan, to begin in 2005, is a phased, five-year takeover of local Medicaid costs by the state. Financing of the state takeover would be accomplished by the "swapping" of up to one percent of local sales tax revenues in exchange for the state assuming the full mandated county share of Medicaid costs. "Our plan would provide immediate relief to Suffolk County taxpayers," noted Assemblyman Fitzpatrick.

Under the plan, no county would be required to give up more sales tax revenue than costs incurred for Medicaid. New York City would be required to dedicate specific revenue to cover its Medicaid costs in exchange for its costs being taken over by the state.

If significant cost-cutting measures are not put in place, state Medicaid expenditures are projected to reach $44 billion in 2004-05. Included in the Assembly Minority conference plan is $626 million in cost- saving measures for fiscal year 2004-05, including $539 million in state share savings, originally proposed in the 2004-05 executive budget. The proposal also includes a restructuring of New York City’s Personal Care Program, producing a state savings of $96 million in 2004-05.

Under this plan, there is no additional cost to the state in the next two fiscal years. This will be accomplished by utilizing the savings associated with the governor’s long-term care takeover proposal.

Cost-saving measures included in the plan proposed by Assembly Minority and the executive budget are:

  • Pharmaceutical drug reform - includes the Preferred Drug Program – Saving $46 million in 2004-05 and $149 million 2005-06.
  • Nursing home reform - includes the refinancing of debt at lower rates and increasing the gross receipts assessment – Saving $127 million 2004-05 and $260 million 2005-06.
  • Home care reform - includes an increase in home care target savings from $33.4 million to $44 million for New York City and Nassau, Westchester and Ulster counties – Saving $26 million 2004-05 and $28 million 2005-06.
  • Long-term care reform - includes closing eligibility loopholes and reducing New York City personal- care hours – Saving $112 million 2004-05 and $151 million 2005-06.
  • Adding efficiency to the Medicaid system, including restructuring Family Health Plus - Saving $44.9 million 2004-05 and $82 million 2005-06.
  • Administrative measures such as voluntary SSI-managed care enrollment, managed utilization of high-cost specialty populations and payment of Medicare Part A premiums for dual eligibles – Saving $54 million 2004-05 and $67 million 2005-06.

Assembly Minority are also studying other measurable cost-saving recommendations proposed by the Governor’s Working Group on Healthcare and the Senate Task Force on Medicaid.