In the face of New York’s rapidly rising Medicaid spending, both the Cuomo administration and some of its critics have pointed to demographics as a driving factor.

The state’s population is aging, they have said, so long-term care costs should be expected to increase.

There are two main reasons to doubt this narrative.

First, Medicaid’s long-term care enrollment is surging too quickly to be explained by demographics alone.

As seen in the chart below, New York’s 65-plus population grew by 16 percent between 2012 and 2018. The older cohorts – who are more likely to need long-term care – grew by 9 percent.

screen-shot-2020-02-07-at-2-25-40-pm-9641800

 

By contrast, enrollment in Medicaid managed long-term care plans soared by 279 percent. That’s 17 times the growth rate of the 65-plus population, and 30 times larger than the rate for the 75-plus population. (See clarification below.)

Second, New York’s Medicaid spending on certain long-term care services is dramatically out of line with that of other states – and has been since before the recent enrollment surge.

A prime example is the benefit known as personal assistance or personal care – which refers to non-medical services, such as bathing, dressing and housekeeping, provided for Medicaid recipients who are too disabled to handle these tasks.

Although this optional benefit is available in 32 other states, the scale of New York’s personal care program is an outlier. As of 2016, its per capita spending was 6.5 times higher than the national average and 65 percent higher than the No. 2 state, which was Massachusetts.

personal-care-per-cap-chart-6025805
Source: U.S. Centers for Medicare & Medicaid Services (Click to enlarge)

 

When Cuomo took office in 2011, New York accounted for 23 percent of nationwide spending on personal care. By 2016, that figure was up to 40 percent – and has undoubtedly continued to rise in the four years since.

So it’s true that New York is older than the national average, and that its elderly cohort is growing faster than the population as a whole (which is stagnant or declining). But demographics alone do not explain why long-term care spending has risen so fast.

CLARIFICATION: It should be pointed out that the initial increase in managed long-term care enrollment, from 2012 to 2015, reflected a change in policy. The state had required many long-term care recipients to switch from “fee for service” coverage, in which the state directly compensates providers, to managed care, in which payment is funneled through private insurance plans.  Thus many if not most enrollees in those first three years were not new to Medicaid.

After that transition was complete in 2015, however, enrollment in continued trending upward at double-digit rates. From 2015 to 2018, enrollment increased 62 percent, compared to 7 percent for the over-65 population.

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

One of New York’s Biggest Medicaid Contractors Is Quietly Acquiring a Competitor

Author's note: This post has been updated to correct an error in the second paragraph. As state lawmakers debate the future of Medicaid home care, one of the program's bigg Read More

New York’s Home Health Workforce Jumped by 12 Percent in One Year

New York's home health workforce has continued its pattern of extraordinary growth, increasing by 62,000 jobs or 12 percent in a single year, according to newly released data from the U.S. Bureau of Labor Statistics.  Read More

While New York’s Medicaid Budget Soared, Public Health Funding Languished

Four years after a devastating pandemic, the state has made no major investment to repair or improve its public health defenses. While funding for Medicaid over the past four years Read More

A Medicaid Grant Recipient Sponsors a Pro-Hochul Publicity Campaign

While much of the health-care industry is attacking Governor Hochul's Medicaid budget, at least one organization is rallying to her side: Somos Community Care, a politically active medical group in the Bronx that recently r Read More

New Jersey’s Pandemic Report Shines Harsh Light on a New York Scandal

A recently published independent review of New Jersey's pandemic response holds lessons for New York on at least two levels. First, it marked the only serious attempt by any state t Read More

A Politically Active Medical Group Gets $29 Million in ‘Distressed’ Provider Funds

State officials awarded $29 million in 'distressed' provider funding to a politically active medical group in the Bronx, state records confirm. a network of physicians and other he Read More

Albany Lawmakers Push a $4 Billion Tax on Health Insurance

Legislative leaders are proposing an additional $4 billion tax on health insurance plans in the upcoming state budget – but withholding specifics of how it would work. Read More

Loss of Patients and Revenue Foreshadowed Downsizing for SUNY Downstate

The SUNY-owned hospital in Brooklyn facing a newly announced downsizing plan has seen its patient volume and revenue plunge over the past decade, according to a review of its financial reports. Read More