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

The State’s Vaccine Appointment System Was Not Ready for Prime Time

The two top priorities Governor Cuomo identified in his State of the State speech Monday morning were "Defeat COVID" and "Vaccinate New York." Read More

New York Is Still Waiting For a Viable COVID-19 Vaccination Plan

Going on four weeks into what should have been a mass vaccination program, it's increasingly clear that the Cuomo administration did not have – and does not have – an adequate plan for immunizing 20 million New Yorkers. Read More

The Cuomo Administration Resists Sharing Records of its Vaccine Review

After second-guessing the FDA with its own vaccine task force, the Cuomo administration is declining to share even basic information about that panel's approval process until mid-February. Read More

Cuomo’s Summary of COVID-19 Contact Tracing Data Raises More Questions Than It Answers

The Cuomo administration's recently released summary of contact tracing data was a tantalizing disappointment. Information that could have clarified the risks of different activities during the coronavirus pandemic was pres Read More

The Pending Pharmacy ‘Carve-Out’ Could Increase Medicaid Costs Rather than Controlling Them

A pending change to New York's Medicaid program known as the pharmacy "carve-out" is drawing opposition from a range of interests, including insurers, AIDS clinics and the health-care labor union 1199 SEIU. Read More

Cuomo NYSDOL to Struggling Small Biz: Your Employees Will Soon Cost More

Despite the crushing impact of pandemic restrictions on small businesses throughout New York, the state Labor Department announced late today that it will move forward with a big minimum wage increase scheduled for the end of the month. Read More

In Spite of Pandemic Precautions, COVID-19 is Surging in New York’s Nursing Homes Again

As the coronavirus pandemic resurges across New York, residents of nursing homes are once again bearing the brunt. During the five-week period from Oct. 25 to Nov. 29, nursing home Read More

Beyond a Bailout, New York Needs Relief from Medicaid ‘Maintenance of Effort’ Rules

Beyond providing direct aid, there's another way the relief package being debated in Washington can and should boost New York's bottom line: by loosening the federal reins on Medicaid. 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.