up-300x227-6268158Despite lingering fears about cuts to health care in Washington, it’s worth noting that federal funding for the state’s massive Medicaid program is still on track to go up, not down, in the year ahead.

When Governor Cuomo raised an alarm last fall, the Senate had just narrowly rejected an Obamacare replacement plan that would eventually have cost New York an estimated $19 billion a year. The state still faced the loss of billions in funding for safety-net hospitals, for Child Health Plus (which covers some 400,000 low-income children), and for the Essential Plan (which covers some 700,000 low-income adults).

But the worst of last year’s threats did not come to pass, leaving financing for New York’s major programs more or less intact—at least so far.

Start with Medicaid. According to Cuomo’s budget proposal for 2018-19, the $68 billion health plan for the poor and disabled, which covers one in three New Yorkers, will receive a federal boost of $342 million, or 1 percent. If past budget proposals are any guide, that’s likely to be a conservative estimate.

The flow from D.C. to Albany continues growing because the Affordable Care Act’s Medicaid expansion—which significantly lifted federal payments to New York—remains in force after the demise of several GOP-sponsored alternatives.

To be sure, New York is losing hundreds of millions under Medicaid’s Disproportionate Share Hospital program—cuts that were enacted in 2010 as part of the ACA itself. Overall, however, the state expects to collect more Medicaid money from Washington in the next fiscal year than in the current one, even as enrollment remains virtually flat.

Also rising is federal aid for the state’s Child Health Plus program, which covers almost 400,000 low-income kids. The shutdown-ending deal in Congress on Monday included a six-year extension of funding for CHP. This means the 88 percent federal contribution to the program for 2018-19, worth over $1 billion, will grow in line with enrollment, which is projected to increase by 3 percent.

One program likely facing some loss of federal aid is the Essential Plan, which provides free or nearly free coverage to some 700,000 lower-income New Yorkers. But the exact impact is unclear, and the Cuomo administration says the plan will continue regardless.

Because of their broad eligibility rules, generous benefits and generally high costs, New York’s state-operated health plans have traditionally drawn a disproportionate share of federal aid. The state accounts for about 10 percent of federal Medicaid spending, for example, even though it represents just 6 percent of the population.

GOP leaders in Congress are still vowing to cut Medicaid and other programs in ways that would undoubtedly hit New York’s bottom line. Whether any such bill can pass the closely divided Senate is far from clear.

For now, New York’s status as a major beneficiary of Washington’s health-care spending is more or less undisturbed.

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

One Brooklyn Health’s Money Troubles Raise a Billion-Dollar Question

A brewing fiscal crisis at One Brooklyn Health, which has received more than $1 billion in turnaround funding from the state, raises the question of whether that money has been well spent. Read More

Federal Staffing Rule Would Compound Hiring Pressure for New York Nursing Homes

Nursing homes that are struggling – and mostly failing – to comply with the state's two-year-old minimum staffing law would face even stiffer hiring challenges under newly proposed federal standards. Read More

What DFS Doesn’t Want To Tell You About Soaring Health Premiums

When the Department of Financial Services made its annual announcement about health insurance price increases last week, it neglected to mention one thing: how much the prices were increasing. Read More

Migrants, Medicaid, and More: NY’s Widening Budget Gap

The multi-billion-dollar gap Governor Hochul and the Legislature must confront in next year’s state budget appears to be growing larger.  Read More

Beware of Medicaid’s Spending Swings

The state's Medicaid spending is becoming increasingly volatile from month to mo Read More

New York’s Health Insurance Affordability Gap Grows Wider

New Yorkers paid some of the highest health premiums in the country in 2022, with one benchmark of affordability reaching its worst level yet, according to recently released federal survey of private-sector benefit plans. Read More

The Health Department’s Medicaid ‘Unwinding’ Report Leaves a Key Question Unanswered

As Medicaid downsizes in the aftermath of the coronavirus pandemic, reporting by New York and other states is missing data on an important group – outgoing enrollees who successfully made the switch to job-based insurance Read More

The Uncertain Math of ‘Coverage for All’

State lawmakers are divided over proposal known as "Coverage for All," which would allow low-income undocumented immigrants to obtain free health insurance through the state-run Essential Plan. Read More

Empire Center Logo Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!