ALBANY – Gov. Andrew M. Cuomo’s office on Thursday offered few details on what he meant when he referred to the state absorbing the rising costs of Medicaid from local governments during his State of the State address.
“Six years ago, we froze the cost of Medicaid to local governments to help them meet their property tax cap,” Cuomo said Wednesday. “For six years, we have been paying all the increased costs on local Medicaid spending. This year alone we’ll spend more than $4 billion in covering the costs.”
New York is facing a $6.1 billion budget gap largely due to a more than $4 billion tab for Medicaid, but lawmakers have yet to offer firm plans on how to address it. Part of the growing Medicaid debt is due to the state delaying payments into the next fiscal year.
Cuomo’s remarks Wednesday left some state fiscal experts wondering whether the executive is considering pushing some of the costs of Medicaid back to localities.
“It’s really hard to say, especially since they’ve kind of denied that that’s what they’re up to,” said Bill Hammond, director of health policy for the Empire Center.
Since Medicaid was instituted in the 1960s, New York and its localities have split the costs. In the 1980s, the state took over the bulk of the costs, leaving counties with a 10 percent share.
While counties in 26 states across the country contribute to Medicaid costs, only 18 of them are mandated to do so and New York’s localities’ share is by far the highest — topping $7 billion annually. New York City comprises the largest portion of the local share at about $5 billion with the remaining counties paying about $2 billion collectively. The costs to localities have remained flat since 2015, and the state has borne those increases.
Hammond said that in 2016 Cuomo had proposed unfreezing the local share for New York City, but it didn’t gain traction.
“It’s more money for the state and it wouldn’t take the form of a direct tax hike on anybody. It’s a way of getting money without taking the blame for raising taxes,” he said. “They sometimes point to the New York City economy being stronger than the rest of the state.”
New York State Association of Counties Executive Director Stephen J. Acquario heard Cuomo’s remarks as a call to action for localities. He said the federal program is extremely important and has been successful, noting that over six million New Yorkers are on Medicaid.
“I think we need to look at what the counties are best at doing in the Medicaid program, what the state is best at doing and how can we combine the talents together to develop the most efficient program,” Acquario said.
Some of that work could be tackling fraud and abuse within the system, he said.
Acquario said they look forward to working with the administration on the issue as Cuomo reconvenes a team to tackle the Medicaid issue.
Cuomo’s office declined to answer specific questions about the issue, and directed a Times Union reporter to a previous statement issued Wednesday by Melissa DeRosa, the governor’s secretary.
“What we’ve seen in the last several months and which you’ll be hearing more about in the budget in a couple of weeks is that when the state took over the growth in Medicaid costs and held the local governments’ harness but allowed the local governments to continue administering the Medicaid program, there was a loss of control in terms of how the money was being spent, when it was being spent, why it was being spent, and that has created structural issues that now have to be addressed,” DeRosa said during a NY1 interview. “We are not going to do this in a vacuum. We have a very successful Medicaid redesign team that we put into place nine years ago. We’re going to replicate that model this year. We’re going to get all the stakeholders around the table. No one wants to do anything to undermine the great progress we’ve made in healthcare.”
A Cuomo spokesman said details would be included in the governor’s proposed budget when it is released later this month.