New York’s per-capita Medicaid spending soared to more than double the nationwide rate in 2018, widening its gap with the other 49 states.

New York’s version of Medicaid, a health plan for the low-income and disabled, cost $3,869 per resident during the federal fiscal year ending in September 2018. That was 107 percent higher than the nationwide cost of $1,866 per resident.

New York’s rate was also 29 percent higher than the second-highest state, which was Alaska.

New York was topped only by the District of Columbia, a city with a large low-income population, which spent more at $4,218 per person.

Source: Centers for Medicare & Medicaid Services

This analysis is based on the most recently available Medicaid Financial Management Report from the federal Centers for Medicare & Medicaid Services.

The disparities between New York and the rest of the country had widened significantly in just two years. In 2016, New York’s per-capita spending of $3,236 was 79 percent higher than the national rate and 14 percent higher than the No. 2 state, which at the time was Vermont.

Albany’s spending surge came at a time of flat or declining overall enrollment, both in New York and nationwide.

During that period, however, New York was experiencing a sharp increase in demand for home-based care, especially the non-medical services known as “personal assistance.” 

As of 2016 – the last year for which nationwide data is readily available – New York accounted for 40 percent of nationwide Medicaid spending on personal assistance, up from 23 percent when Governor Cuomo took office in 2011. The program has continued to grow rapidly in the years since – and became a central target for the cost cutting changes recommended by the governor’s Medicaid Redesign Team earlier this year.

The coronavirus pandemic is likely to increase pressure on Medicaid’s finances. Between February and May, enrollment in the program jumped 4.3 percent to an all-time high of more than 6.3 million.

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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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.