James T. Mulder

ALBANY, NY – Gov. Andrew Cuomo wants to make New York counties pick up a bigger share of the state’s soaring Medicaid costs if they don’t curb increases in local property taxes and Medicaid spending.

That’s one strategy Cuomo outlined today in his proposed 2021 spending plan which seeks to close a $6.1 billion budget deficit.

About $2 billion of the deficit is related to rising Medicaid costs.

Medicaid is a nationwide health plan for the poor and disabled jointly paid for in New York by federal, state and local governments. The annual cost of New York’s Medicaid program has grown to $73 billion. About one of every three New Yorkers is enrolled in the program.

New York counties initially paid 25 percent of the New York’s Medicaid costs, the state paid 25 percent and the feds paid the rest.

The state froze Medicaid contributions paid by county governments in 2012. The state began picking up any increases in the non-federal share of the program’s costs.

Cuomo said the state froze those costs after counties complained rising Medicaid costs were making it hard for them to comply with the state’s 2 percent property tax cap enacted in 2011. Cuomo said the freeze has saved local governments $20 billion.

Cuomo said even though local governments determine Medicaid eligibility, they have no incentive to curb Medicaid spending because of the freeze. He complained that local governments have “no skin in the game.”

“We are signing the check and they are filling in the amount,” he said.

Under his proposal, the state would make counties pay more for Medicaid if local property tax increases exceed 2 percent. Counties that exceed the property tax cap would have to pay for any growth in local Medicaid spending that exceeds 3 percent annually.

When Cuomo took office in 2011 he created a Medicaid Redesign Team to rein in Medicaid spending. That team made a series of sweeping changes that slowed the rate of Medicaid growth. But in recent years Medical costs have spiraled.

Cuomo’s budget proposal blames some of the higher costs on changing demographics. New York’s population of people 65 and older grew 24 percent over the last 10 years. Spending in the Medicaid Long Term Care program which covers the elderly and disabled increased 300 percent between 2013 and 2019, according to the proposed budget.

Cuomo wants to resurrect the Medicaid Redesign Team to further reform Medicaid and find $2.5 billion in savings by April 1.

Critics say the Cuomo administration is partly to blame for soaring Medicaid costs and the deficit.

Cuomo quietly increased Medicaid payments by 2 percent to hospitals and 1.5 percent to nursing homes just before Election Day in 2018 at a time when Medicaid spending was running hundreds of millions of dollars higher than expected, according to a report by the Empire Center, an Albany think tank. Cuomo than reversed course and cut most Medicaid payments by 1 percent early this year.

The Citizens Budget Commission of New York said in a recent report the state overspent on Medicaid in 2019 and “papered over the problem” by delaying $1.7 billion in Medicaid payments from fiscal year 2019 to fiscal year 2020. The commission said the state should not use “gimmicks” like that to balance the budget.

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