kolb-199x300-4311783Any plan to reduce or eliminate what local governments pay into New York’s Medicaid budget would inevitably create winners and losers. The Assembly Republicans’ version, unveiled last month, is no exception.

Assembly Minority Leader Brian Kolb and his members are proposing to phase out Medicaid contributions by county governments over the next 10 years while cutting New York City’s contribution in half over the next 20 years.

Likely to come out ahead under this scenario are the taxpayers in the five boroughs and most upstate counties, because their savings on local Medicaid costs would outstrip their share of the expense shifted to state government.

Likely to come out behind are residents of Long Island and the downstate suburbs, where Medicaid costs are relatively low and state tax payments are relatively high. Also clear losers would be commuters who work in New York but live out-of-state—since they pay no local taxes here but account for about 15 percent of state revenues.

The rough numbers are shown in the chart below. It’s based on local Medicaid costs provided by the Association of Counties, and a regional breakdown of 2010-11 state revenues from the Rockefeller Institute of Government.

screen-shot-2018-04-19-at-9-24-02-am-6718216

Some other states require local governments to pay a small part of Medicaid costs, but the cost shift by New York is bigger than those of all other states combined. For most counties, Medicaid is the single largest budget expense—and often exceeds their entire revenue from property taxes.

Governor Mario Cuomo first proposed to phase out the county contribution in 1994—with the catch that counties would have had to give up a share of sales tax revenue in trade.

County contributions were growth-capped by Governor George Pataki and later frozen by Governor Andrew Cuomo.

Last year, U.S. Representatives John Faso (R-Kinderhook) and Chris Collins (R-Clarence) cosponsored federal legislation requiring New York to eliminate Medicaid contributions for all counties outside New York City. The proposal was also included as an amendment to various bills intended to repeal and replace the Affordable Care Act, none of which ultimately passed.

The winners and losers of that plan—analyzed here, here and herewere significantly different because it omitted New York City from the takeover. All counties outside the city stood to save money under that version, while New York City would have paid substantially more.

The Assembly GOP’s takeover plan is part of a broad bill meant to reduce benefit “cliffs” in various public assistance programs, increase certain tax credits and generally reduce the burden of property taxes.

Backers say they would finance the Medicaid takeover and other expenses by cutting costs elsewhere, including a 50% reduction in the film and TV production tax credit and elimination of the property tax rebate checks.

However, those ideas are not included in the proposed legislation, would not cover the full cost of the proposed expenditures and could be implemented with or without a Medicaid takeover. They are not factored into the cost-benefit analysis above, which looks at the impact of the takeover standing alone.

About the Author

Bill Hammond

As the Empire Center’s senior fellow for health policy, Bill Hammond tracks fast-moving developments in New York’s massive health care industry, with a focus on how decisions made in Albany and Washington affect the well-being of patients, providers, taxpayers and the state’s economy.

Read more by Bill Hammond

You may also like

The Attorney General’s MFCU SNAFU

Attorney General Letitia James' latest fight with the Trump administration focuses on New York's Medicaid Fraud Control Unit, a federally funded agency housed in James' office. On T Read More

Healthcare Revelations in the Enacted Budget Financial Plan

The state financial plan published on June 10 disclosed key information about healthcare revenue and spending that lawmakers had not made public when approving the annual budget two weeks before. Read More

Federal Suit Traces Medicaid Fraud to the Top of NYS Government

The Trump administration's latest salvo against Medicaid fraud takes aim at a different kind of target – two high-ranking New York officials along with a major state contractor. A Read More

Healthcare Highlights in the New State Budget

Governor Hochul's focus on affordability seems to have skipped over the healthcare portions of the new state budget. The deal finalized May 27 Read More

Lawmakers Consider Hiking Fees for Filling Prescriptions

UPDATE: The proposal discussed below passed the Assembly Friday evening by an unofficial vote of 133-0. Having previously been approved by the Senate, the bill will head to Governor Hochul's desk for her signature or ve Read More

Albany Wavers on Shutting Down a Medicaid Racket

As Washington threatens to crack down on fraud and abuse in New York's Medicaid program, state legislators are doing their best to demonstrate why federal intervention is needed. A Read More

Ideas for Cleaning Up New York Medicaid

As the Trump administration cracks down on fraud, waste and abuse in Medicaid, New York is a logical place to start. New York spends far more Read More

Emails Conflict with Health Commissioner’s Testimony on CDPAP

The company selected to manage an $11 billion Medicaid home-care program discussed the job in detail with top Health Department officials – and submitted a 46-page takeover plan – two weeks before state lawmakers author Read More