Perhaps the most damning commentary on Gov. Hochul’s Medicaid spending plan — which made up roughly half of the $252 billion state budget she released Tuesday — was the silence of the attack dogs.
Last year, the hospital lobby spent millions on TV ads falsely accusing Hochul of “cutting” the state-run health plan, which covers 7 million lower-income New Yorkers.
This year, the ad campaign has gone quiet, a sign she is giving hospitals everything they could want and more.
This appeasement comes at a high price for taxpayers: The governor is proposing to jack up the state-funded portion of Medicaid by $6.4 billion, or 17%, in a single year — and that’s before the Legislature makes its inevitable additions.
This comes on top of a combined 36% increase over Hochul’s first three years as governor.
When this Medicaid budget is through, it’s likely to spend 60% more than what she inherited in 2021 — which even then was the costliest Medicaid program in the United States on a per capita basis.
Even Hochul acknowledged — in the mere eight sentences she devoted to this topic in her budget presentation — that this growth “isn’t sustainable for New York taxpayers on its current trajectory.”
Of course, she was the one who put it on that trajectory.
Her proposed solution is “to take action alongside the federal government to manage this growth.”
Maybe she hasn’t seen the headlines lately, but Republicans in Washington are preparing to squeeze trillions in savings out of Medicaid. Bailing out a spendthrift blue-state governor is not on their to-do list.
Another head-scratching note came from the governor’s budget briefing book.
After acknowledging that spending is out of control, it said the governor’s budget strategy consists of “maintaining Medicaid spending at current natural levels of growth.”
Sorry, but there is nothing “natural” about Medicaid’s current spending spike.
The state’s economy is growing, its unemployment rate is low, and the poverty rate has been trending down — all of which should mean less demand for what is meant to be a safety-net health plan for the poor and disabled.
They didn’t mention that enrollment peaked in 2023 and has come down by 1.1 million since then. By rights, Medicaid costs should now be falling.
But they’re skyrocketing instead — because in Albany, Medicaid isn’t just about taking care of the needy, but increasingly about pumping money into the health-care industrial complex, often in ways that have nothing to do with the best interests of the poor or disabled.
One of Hochul’s recent Medicaid-funded initiatives aims to “recruit and train thousands more health care workers” — even though New York already boasts the largest health-care workforce per capita of any state.
Naturally, a chunk of that money is going to the state’s largest and most influential health-care union, 1199 SEIU.
Another growing expense consists of ongoing bailouts for financially “distressed” hospitals, which typically are losing money because patients have fled to other providers.
In effect, the state is paying failing facilities to staff and maintain their emptying wards.
The epitome of Hochul’s spendthrift approach is a newly enacted tax on managed care organizations, a gimmick to cadge an extra $3.8 billion in federal Medicaid funding over the next two years — at which point Washington is expected to shut down the loophole that makes it possible.
It’s a temporary shot of cash at best, yet Hochul is proposing to use it to hike Medicaid reimbursement rates for hospitals, nursing homes and other providers — leaving an expensive hole to fill when the money runs out.
Meanwhile, her budget fails to address the health-care system’s most urgent problems.
Where is the initiative that will finally goad New York’s hospital industry to improve their quality rankings, which sit near the bottom on national report cards? Or to shorten their average emergency-room wait time of 3 hours and 22 minutes, the fifth worst of any state?
What is her plan for cracking down on patient neglect and profiteering in nursing homes, as exposed in lawsuits filed by Attorney General Letitia James?
Speaking of affordability — a new Albany buzzword — why isn’t Hochul working to lower health-insurance premiums that rank among the highest in the country, driven largely by state-imposed taxes and regulations?
The answer isn’t hard to find: The health-care industry is the single wealthiest and best-organized lobbying force in the state.
Its forces reward politicians who give them money while punishing those who dare to question the poor return on that investment.
Hochul’s Medicaid splurge isn’t buying better care for New Yorkers. It’s buying her a reprieve from the hospital lobby’s attack ads.
Taxpayers can only imagine how much more expensive this strategy will get in 2026, when she and the entire Legislature are up for re-election.
About the Author
You may also like
How NY businesses get shafted — as Albany boosts Idaho’s Micron with $5.5B
Every business owner in the state, looking at his or her own challenges, their tax bills, their regulatory burden, should be asking the question: How different would things be if my company was a politically favored project being announced by the governor? What favors would Albany do for me? What would Micron get? Read More
Can New York Survive a Cuomo Comeback?
Andrew Cuomo picked a portentous day to launch his New York City mayoral campaign. Sunday was the fifth anniversary of his announcement, as governor, of the city’s first confirmed case of Covid-19. Read More
Hochul invites havoc as wildcat prison strikes spread
A central provision of New York state law — its prohibition on public-employee strikes — is at risk of breaking into pieces, as Gov. Hochul frantically tries to tape the shards back together. Read More
NY’s own researchers warn of state’s off-the-charts school spending
What was expected to be a mundane state-ordered study into how Albany doles out cash to local school districts turns out to be required reading for New York taxpayers — and state lawmakers. Read More
New York Is a Cautionary Tale on Home Care
Fans of ’s “Medicare at Home” proposal should study up on New York’s bloated home healthcare system, which covers about 850,000 people. Its large scale and rapid growth embody a cent Read More
Hochul bows to health-worker union’s $9B senior-care power play that could bust NY’s budget
Gov. Hochul’s overhaul of the reached a milestone last week when she named a Georgia-based company as the winning bidder to be the program’s statewide “fiscal intermediary” — and to replace that currently handle those duties.
The dre Read More
Another Voice: Albany’s MTA congestion pricing battles have implications for Western New York
Gov. Kathy Hochul has taken blistering criticism for postponing congestion pricing, a long-planned $15 toll on drivers entering lower Manhattan meant to reduce traffic — and collect $15 tolls.
Most of the drama may be playing out in New York City, but pay attention, upstate: you stand to lose — or win — in this fight. Read More
Another Voice: Money Isn’t the problem for New York schools – the lawmakers are
Anyone wondering how New York consistently has the nation’s highest public school spending but below-average student outcomes got a succinct explanation from Albany earlier this month. Read More