As New York’s health-care industry agitates for more money from the state budget, two of its most influential lobbying groups are airing TV ads that make alarmist and inaccurate claims about Medicaid.

One of the spots asserts that the state’s leaders “have failed to invest in Medicaid, putting millions of the most vulnerable at risk.” Another says that “New York’s Medicaid rate has only increased 1 percent in 15 years, causing a severe workforce shortage.”

In fact, New York’s per capita “investment” in Medicaid – a government-funded health plan for the lower income and disabled – is 65 percent above the national average and highest among the 50 states.

 

In fact, the state's Medicaid spending has grown by about 100 percent – or roughly doubled – over the past 15 years, including an increase of 28 percent or $20 billion since 2019.

In fact, it was the pandemic, not Medicaid policy, that primarily triggered the recent shortage of health workers – and the worst of it appears to be over: According to the Bureau of Labor Statistics, statewide health-care employment hit an all-time high of just under 1.3 million in December.

The ads painting a distorted picture of these facts came from the Healthcare Education Project, a joint lobbying arm of the Greater New York Hospital Association and the health-care labor union 1199 SEIU. The spots were recently broadcast on WTEN, the ABC affiliate in the Albany area, among other places.

 

 

The Healthcare Education Project has used TV ads to pressure Albany many times in the past – typically to push back against governors for attempting to rein in Medicaid costs. What's striking about this campaign is that Governor Hochul did not pick the fight. Her budgets this year and last were unusually generous to Medicaid and health-care in general – and yet she is still coming under attack.

 

 

The group's ads fault Hochul for proposing to "cut $700 million from safety-net hospitals" and for leaving a "massive Medicaid coverage gap." These claims, too, are misleading without further context.

Last year's budget earmarked extra money to help certain financially distressed hospitals cope with pandemic-related disruptions. Now that the COVID crisis has ebbed, Hochul is indeed proposing to scale back that line item.

Overall, however, Hochul is proposing to increase the state's contribution to Medicaid by almost $3 billion or 9 percent – which is roughly double the average growth rate of the previous decade. The ads are cherry-picking an isolated cutback when total spending is going up.

As for the supposed "Medicaid coverage gap," the ads do not make clear what that phrase means. Overall, however, New York's Medicaid coverage is broader than those of most other states – and the program's current enrollment is at an all-time high of more than 7 million, or about 40 percent of the state's population.

Similarly, it's not clear what the ads mean when they say the "Medicaid rate has only increased 1 percent in 15 years." This may refer to how the state sets the fees paid to providers, which are also called "rates." State law formerly called for them to be increased every year by an inflation-like "trend factor." That policy was suspended during the Great Recession of 2008 and later abolished in 2011, meaning some provider fees were left unadjusted for years at a time.

Still, they weren't frozen – or limited to 1 percent in 15 years. 

The Cuomo administration ordered a 2 percent bump for hospital fees in 2018. That was partially rolled back in 2020, but then restored in last year's budget – with another 1 percent hike on top of that. This year, hospitals stand to receive an rate increase of 5 percent under Hochul's budget, or 10 percent under counter-proposals from the Assembly and Senate.

Meanwhile, the state has poured billions into health-care outside the fee structure – including grant programs earmarked for structural reform or to finance capital projects.

Overall in 2021, the Medicaid revenue collected by New York hospitals amounted to $2,200 per enrollee, which was 27 percent above the U.S. average.

The truth is that New York's Medicaid coverage is unusually broad and its spending is unusually high. Groups representing hospitals and health-care unions have the right to argue that their members should receive more of the taxpayers' money – but they should do so based on facts rather than misinformation.

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

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