Perhaps the most remarkable thing about Governor Cuomo’s Medicaid budget is how little it changes the program’s spending pattern.

In spite of a once-in-century pandemic that rocked the state’s health-care system and decimated state revenues, the governor is proposing 4.7 percent growth in overall Medicaid spending for FY 2022 – compared to 4.5 percent this fiscal year, and 4.7 percent the year before. As seen in the first chart below, total spending rises in a virtually straight trajectory.

Underneath the surface, the program saw considerable turmoil.

The governor’s Medicaid Redesign Team proposed $2.2 billion in cost-cutting changes to close a pre-existing deficit, much of which was delayed because of strings attached to federal relief funding.

The fast-spreading novel coronavirus caused some hospitals to overflow and others to empty out for lack of elective procedures. Thanks to relief legislation, the federal share of Medicaid funding rose and the state and local shares shrank.

Meanwhile, enrollment surged as the economy crashed and jobs disappeared.

At the bottom line, however, those swirling currents seem to have cancelled each other out. They left the state with the same problematic growth trajectory – at roughly three times the inflation rate – that existed before the COVID-19 crisis began.

On a quarterly basis, spending has fluctuated dramatically, apparently a byproduct of payment delays that the Cuomo administration has used to manage – and conceal – a burgeoning deficit (see second chart). This dysfunctional phenomenon, too, is consistent with the pre-pandemic normal of New York Medicaid.

The fact that these trends are steady does not make them sustainable. Even when the economy was strong, Medicaid’s growth rate was bursting past expectations and throwing the state budget out of balance. The state can afford it even less now, with a crippled economy and multi-billion-dollar gaps to close for years to come.

Yet the governor’s budget makes little effort to apply the brakes. It anticipates that overall costs will rise by $3.7 billion – and that the state’s contribution will jump $5 billion, or 22 percent – on top of what is already by far the heaviest Medicaid spending in the United States.

To make that even remotely possible, Cuomo is betting the newly installed Biden administration will send New York billions more – effectively relying on short-term relief to further put off a necessary reckoning.

That’s a short-sighted strategy. If he and Legislature tolerate excessive Medicaid growth now, they will only have to cut deeper when the temporary federal money inevitably goes away.

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

New York’s Proposed ‘MCO Tax’ Would Generate a Fraction of What Lawmakers Expected

The Hochul administration's proposed "MCO tax" would generate far less than the $4 billion in extra federal aid anticipated by state lawmakers when they approved the concept this spring, according to documents obtained by t Read More

Cuomo’s House Testimony Added New Misinformation about Covid in Nursing Homes

Throughout the scandal over former Governor Andrew Cuomo's handling of Covid-19 in nursing homes, Cuomo and his administration repeatedly spread bad information – misstating how its policies had worked, understating death Read More

Hochul Hides the Specifics of a Looming Tax on Health Insurance

The Hochul administration has requested federal approval for a multibillion-dollar "MCO tax" on health plans without announcing the move or providing details to the public. As by l Read More

Hochul’s CDPAP Overhaul Hands a Costly Win to 1199

Governor Hochul's overhaul of the Consumer Directed Personal Assistance Program reached a milestone Monday when she named a Georgia-based company as the winning bidder to be the program's statewide "fiscal intermediary" – Read More

What Paul Francis Got Wrong About the Empire Center’s Nursing Home Research

In February 2021, the Empire Center published the first independent analysis of the Cuomo's administration much-debated directive ordering Covid-positive patients into nursing homes. The report found that the directive was associated with a statistically significant increase in resident deaths in the homes that admitted the  infected patients. Read More

Internal Cuomo Administration Documents Showed Evidence of Harm from Nursing Home Order

State Health Department documents from June 2020, newly unearthed by congressional investigators, appear to show harmful effects from a controversial order requiring nursing homes to admit Covid-positive patients. Read More

On Covid in Nursing Homes, There’s No Comparison Between Cuomo and Walz

Former Governor Andrew Cuomo and his political critics have something in common: They're both trying to drag Minnesota Governor Tim Walz into Cuomo's nursing home scandal. Cuomo’s attempt to hide behind Walz, li Read More

How 1199 Earns its Reputation as Albany’s No. 1 Labor Power Broker

For the fourth time in six years, the president of New York's largest health-care union, George Gresham of 1199SEIU, has won the top spot on the "Labor Power 100" list from City &am Read More