Governor Cuomo’s $15 minimum wage plan will cost the state’s Medicaid program more than $100 million over the next two years, according to figures in a budget analysis released Wednesday by state Comptroller Tom DiNapoli.
DiNapoli’s report said the 67 percent minimum wage hike will add $12.7 million to New York’s already enormous Medicaid spending in the 2017 fiscal year, which began April 1, and another $88 million in FY 2018.
These are the first official estimates of a little-discussed hit to taxpayers that’s bound to grow many times larger in 2019 and beyond
While the minimum-wage debate focused largely on fast-food and retail businesses, the health-care sector also employs many thousands of workers who make substantially less than $15. A share of the cost of their raises will be passed along to Medicaid, the state-federal health plan for the poor and disabled that covers almost one-third of the state’s population.
Both Medicaid patients and the lower-wage health workers who serve them are concentrated in the New York City area, where the minimum wage is scheduled to increase fastest—to $11 at the end of this year, $13 by the end of 2017, and $15 for all but the smallest employers at the end of 2018. The wage will rise to $15 in Long Island and Westchester County by 2022; in the rest of the state it is scheduled to hit $12.50 by 2021, and thereafter to rise in line with a still-to-be-calculated index.
Because the wage escalates over time – and covers a larger and larger swath of employees – the figures in DiNapoli’s report are the tip of an iceberg.
The $88 million estimate for FY 2018 covers nine months when the New York City minimum wage will be $11 and three months when it will be $13. That suggests that the full-year cost of the $13 minimum wage would be roughly four times as much, or $352 million.
By the way, these figures account just for the state’s share of Medicaid. The federal government, which picks up just over half the tab of New York’s program, will end up chipping in hundreds of millions more in added wages. So, too, will the federal Medicare health plan for the elderly and, of course, private health insurers.
Another hint at the enormous bite of this wage hike for the health-care sector came during a hearing on the governor’s minimum wage proposal by the state Senate Labor Committee.
In answer to a question from Sen. Kathleen Marchione of Saratoga County, an official of the health-care workers union 1199 SEIU said 80,000 of its members were then making $10 an hour, or $1 more than the existing minimum.
Assuming full-time hours, the tab for lifting that group alone to $15 an hour would be more than $800 million a year – all of it ultimately coming out of the pockets of New Yorkers who pay taxes and insurance premiums.
About the Author
You may also like
Medicaid’s Missing Million
The Health Department has been either unable or unwilling to document the eligibility status of almost one million Medicaid recipients, raising further concern about the possibility of large-scale over-enrollment. Read More
New York’s Medicaid Spiral Is Worse Than Hochul Admitted
Although Governor Hochul said last week that the current trajectory of Medicaid spending is "not sustainable," the upward trend is even steeper than she and her budget director have acknowledged.
Read More
NY’s Road To Electric School Buses Gets Bumpy
New York in 2022 told school districts they’d be barred from purchasing gasoline- or diesel-powered buses after 2027, and instead have to buy electric buses at more than double the upfront cost.
“The purchase of new electric buses will help grow the market,” officials later pledged, “which will in turn help reduce prices.”
Unfortunately for taxpayers, those reductions aren’t materializing—because state officials put the prices, and future increases, on cruise control. Read More
Hochul Shows a Jarring Lack of Direction on Health Care
Financing and regulating health care delivery is one of the biggest responsibilities of state government, yet Governor Hochul had remarkably little to say on that topic in her State of the State speech on Tuesday.
Read More
Hochul’s Pushing Affordability. It Would Cost A Lot.
Governor Hochul is hammering an “affordability” theme in the leadup to Tuesday's 2025 State of the State address. But her campaign, dubbed "Money In Your Pockets," has so far featured little that would reduce the cost of providing, and therefore buying, goods or services in New York.
Instead, the biggest announced and expected elements reflect Albany's waning interest in growing the state economy—and a greater appetite to redistribute what it produces. Read More
Unions Reprogram NYS To Do Less With More
Governor Hochul on Saturday signed an innocuous-sounding bill to “regulate the use of automated decision-making systems and artificial intelligence techniques by state agencies.” But the “Legislative Oversight of Automated Decision-making in Government,” or LOADinG Act, wasn’t about protecting New York from self-aware computers trying to wipe out humanity. Instead, it was an early Christmas present for the state's public employee unions—and a lump of coal for New Yorkers hoping for more efficient state government. Read More
Former Utility Regulator Warns State Lawmakers They’re On the Naughty List
A legislative hearing into spending by the state’s sprawling energy agency featured a surprise guest who offered sober warnings about Albany’s energy policy. Read More
New York’s Public Employee Shortage Is Over
Public employee unions complained loudly when New York's state government workforce shrank during the coronavirus pandemic, using that decrease as pretext to press Governor Hochul and state lawmakers for more hiring and costly giveaways to benefit their members. But the latest data show nearly every state agency has more employees than it did a year ago, and that by at least one key measure, the state workforce is larger than it was before COVID. Read More