Nick Reisman

Medicaid spending is threatening New York’s ability to close future state budget gaps in the coming years, making for an “Achilles heel” for its finances, Moody’s on Tuesday reported.

New York’s budget gap for the coming year stands at $6.1 billion, with much of that fueled by overspending in the state’s Medicaid program, the costliest in the country.

“For the current fiscal year, the state needs to take nearly $1.8 billion in budget-balancing actions, even after accounting for a $2.2 billion Medicaid spending deferral into next year,” Moody’s found. “The state’s ability to return to a sustainable and structurally balanced budget will significantly hinge on rekindling its previous commitment to control Medicaid costs.”

Gov. Andrew Cuomo’s administration has previously blamed a trio of issues facing Medicaid spending: An increase in the minimum wage, a phase out of federal funding and an aging population that has seen more people enroll in long-term care.

A mid-year budget update report released last month indicated the Department of Health and the governor’s budget office was working to devise a solution meant to stem costs.

The Empire Center in October noted the global cap imposed on Medicaid spending by Cuomo and the Legislature in 2011, tying it to the medical inflation rate, has faltered amid loopholes and compliance issues. The state has postponed more than $1 billion in payments into the 2020 fiscal year.

“As the Moody’s report shows, New York State has kept Medicaid spending growth to less than half the national average – saving taxpayers billions of dollars — and has been key to limiting overall state spending growth to below 2 percent annually as more New Yorkers have health care coverage than ever before,” said Division of Budget spokesman Freeman Klopott.

“While Medicaid spending is projected to grow at almost 6 percent annually nationally, we are developing a plan to be introduced in January that will once again limit New York State’s Medicaid spending growth and continue high quality care for six million New Yorkers.”

© 2019 Spectrum

You may also like

EDITORIAL: Nursing home report requires a second opinion

No doubt, the Health Department and the governor would like this report to be the final word on the subject. But if it’s all the same with them, we’d still like a truly independent review. Read More

NY Health Department Asserts Cuomo Order ‘Could Not Be the Driver’ of Nursing-Home Deaths in the State

The New York State Department of Health has concluded that an executive order requiring nursing homes to readmit coronavirus patients, issued by Governor Andrew Cuomo, was not the driving factor behind coronavirus deaths in the state’s nursing homes. Read More

Independence of New York’s nursing home report faces scrutiny

When New York released a study absolving the state as well as nursing homes and other health care facilities of blame for the more than 6,000 COVID-related nursing home deaths, health care industry leaders quickly confirmed the state’s findings in statements issued by the administration of Gov. Andrew M. Cuomo. Read More

Health insurers ask for average 11.5% premium increase amid COVID-19 uncertainty

Health insurance companies regulated by the state are waiting to hear back about their requests for 2021 rate changes for premium holders. The companies, like nearly every other industry, face many uncertainties due to the COVID-19 pandemic, and their requests vary widely. Read More

Hammond: We Need To Learn What Happened In Nursing Homes

Why did more than 6,000 nursing home residents die in New York during the height of the coronavirus pandemic? Read More

NY’s ‘cash out’ policy has survived a lot. Can it outlast the pandemic?

With the pandemic damaging the economy, fiscal experts question whether New York will continue to sustain a generous policy that lets police, teachers and other public employees cash in unused vacation, sick and other paid days off when they leave a job — or whether the system has become so ingrained in politics that it’s considered off limits no matter what. Read More

Lawsuit may hold MTA in violation of Freedom of Information Law over payroll disclosure

The Empire Center for Public Policy plans to take the Metropolitan Transportation Authority to court for allegedly violating the Freedom of Information Act for failure hand over payroll records of MTA cops to the government transparency group. Read More

Watchdog group sues MTA for allegedly withholding police overtime records

The MTA is withholding wage and overtime information about some of its police officers from a watchdog group, a new lawsuit alleges. Read More


Sign up to receive updates about Empire Center research, news and events in your email.


Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100
Fax: 518-434-3130


The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.