The $15 minimum wage is going to end up costing New York taxpayers an extra $838 million a year in Medicaid payments by 2020 — double what the Cuomo administration estimated.
According to the mid-year state budget, taxpayers will shoulder an additional $44 million next year when wages for home health care aides, orderlies and other low-paid medical workers contracted with Medicaid increase from $9 to $11 an hour.
Officials originally estimated the first year would add just $13 million to the state budget.
When wages are eventually hiked to $15 by 2020, the extra cost will reach a staggering $838 million a year — more than double the $411 million officials originally estimated.
The fiscal bombshell can be found in two paragraphs on page 81 of the 391-page budget, released Monday.
It dryly reads: “Minimum wage initiatives, inclusive of revised forecast assumptions, are expected to increase annual Medicaid spending above statutory Global Cap limits by $44 million in FY 2017; $255 million in FY 2018; $579 million in FY 2019; and $838 million in FY 2020.”
Bill Hammond, a writer specializing in Medicaid issues for the Empire Center’s NY Torch blog, said when he reviewed the budget, it confirmed his suspicion that the administration intentionally underestimated the cost to make it more palatable to taxpayers.
George Gresham, president of the 1199 United Healthcare Workers union, testified in January before the state Senate Labor Committee that there are about 80,000 aides, orderlies and clerical workers in New York now earning no more than $10 an hour.
“It didn’t come as a surprise that it was going to cost a lot more than they originally admitted. What’s surprising is how far they low-balled the number earlier,” he told The Post.
According to the wording of the budget, officials revised the forecast based on “an updated analysis of wage data within the health care sector.”
Union spokeswoman Helen Schaub insisted the new numbers don’t reflect that higher paid workers will pay more taxes and get off food stamps, and added higher wages would result in improved care because of less workforce turnover.
Morris Peters, a spokesman for the state Division of the Budget, responded by saying:
“The Governor is committed to paying a fair wage to healthcare workers who provide an essential service to our most vulnerable New Yorkers. The updated numbers reflects statute enacted subsequent to our initial estimates, as well as additional analysis on the costs associated with the wage increase to providers. We continue to work with all stakeholders to ensure access to affordable, high-quality care for our state’s residents.”
© 2016 New York Post
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