emergency-sign-at-hospital-150x150-3835902In a sign of pandemic-related strain on state finances, the Cuomo administration is postponing a series of multi-billion-dollar Medicaid payments over the next three months.

State officials notified health plans last week that $3.4 billion in Medicaid premium payments due on April 22 and 29 will instead be paid on May 1. Similarly, payments due in late May are to be pushed into June, and payments due in June are to be pushed into July.

The rolling delays add to fiscal turmoil in the Medicaid program, a government-funded health plan for the low-income and disabled that covers 6 million New Yorkers.


This is an installment in a special series of #NYCoronavirus chronicles by Empire Center analysts, focused on New York’s state and local policy response to the Coronavirus pandemic.


The state already postponed a month’s worth of Medicaid payments from March to April – repeating a maneuver it used last year to make its books appear to balance even as spending ran well over budget.

Comptroller Tom DiNapoli said the amount of this year’s deferral was $2.3 billion, or about $600 million more than the amount of state-funded Medicaid spending the Cuomo administration had previously projected it would defer. The comptroller’s office said its number included federal matching aid, which might explain the disparity.

The delays planned for April, May and June appear to be driven by cash flow. Even in a normal year, the state’s coffers tend to run low in the spring because of large school aid payments that go out in March and May. 

The problem is accentuated this year because the state, like the federal government, put off its tax filing deadline as a measure of relief for people whose incomes have been disrupted by pandemic-related shutdowns. The result is that billions in income-tax revenue that normally arrives in April won’t be coming until mid-July.

In the longer term, the state also expects its tax collection will be decimated by the economic slowdown. Governor Cuomo said Friday that updated forecasts show revenues will be $13.3 billion lower expected when he presented his budget proposal in January.

The budget approved by the Legislature earlier this month gives Cuomo broad power to cut spending in the middle of the fiscal year – which he has warned will be necessary in the absence of a bail-out from Washington – and to plug budget holes with up to $11 billion in borrowing. He was expected to release an updated financial plan by the end of this week.

 

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

De Blasio’s (Apparent) Good Move Dissolves Into Phony “Savings”

Late Thursday, as hailed in this space, Mayor de Blasio finally made a decisive move—or at least seemed to make a move—in the direction of actually saving some money on labor costs by getting tough with a powerful (and powerfully self-entitled) municipal union. Read More

‘Clusters’ Drive a Widespread Surge in New York’s Coronavirus Infection Rates

New York's coronavirus infection rates have surged to their highest levels since May, pushing 10 counties – including Brooklyn, Rockland and Orange – above a threshold that the Cuomo administration uses to justify travel restrictions on other states. Read More

Not a Moment Too Soon, Bill de Blasio Is Setting a Good Fiscal Example

After months of flailing, floundering and stalling on desperately needed cuts to New York City's pandemic-ravaged budget, Mayor de Blasio just made a smart and appropriate move to save money—in the process defying one of New York's most powerful government employee unions. Read More

Cahill Charges Are An Indictment Of Cuomo’s Policies

Yesterday’s indictment of the state’s top construction union official on federal corruption charges raises a big question: if private companies are paying bribes to avoid having to work with certain construction unions, why is Governor Cuomo insisting that the state keep doing it? Read More

A Federal Emergency Rule Is Inflating New York’s Medicaid Enrollment

Strings attached to federal coronavirus relief funding appear to be inflating New York's Medicaid enrollment – and costs – at a time when the state faces unprecedented deficits. Read More

Sluggish Reopening: NY’s Private Job Count Down 1.1 Million From Pre-Pandemic Level

Six months into the novel coronavirus pandemic, New York State's private-sector employment recovery was the slowest in the 48 contiguous states—and getting slower. Read More

New York State Has Dug Itself Into Its Deepest Hole On Record

"State's Financial Hole Deepens" is the headline on Comptroller Thomas DiNapoli's press release accompanying the August cash flow report. Read More

Even After Aid Cut, New York Will Spend Most on Education

If New York was a country in 2016—the most recent year for global education spending data—it would have boasted the highest per pupil expenditure in the world, even after subtracting 20 percent of state aid. Read More

Subscribe

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

CONTACT INFORMATION

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

Phone: 518-434-3100
Fax: 518-434-3130
E-Mail: info@empirecenter.org

About

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.