The feasibility of a full state takeover of the remaining local share of Medicaid costs in New York is explored in a new report released today by the Empire Center for Public Policy.

Authored by health policy director Bill Hammond, the report’s key findings include:

  • Fully abolishing the local Medicaid share would require reallocating almost $8 billion in state resources or—due to the effects of federal matching aid—cutting almost twice that amount from Medicaid spending.
  • Excluding New York City from relief would reduce the cost by 70 percent, but would be hard to justify on fairness grounds.
  • Potential impact of a takeover on total local property tax levies would vary widely around the state, ranging from an average of just 4 percent on Long Island to 13 percent in the Mohawk Valley and western New York regions. New York City’s Medicaid share is equivalent to nearly one-quarter of its property taxes.
  • Strengthening an existing cap on New York’s Medicaid spending, which remains among the highest in the country, would potentially save enough money to finance a takeover within two decades.
  • If a takeover is pursued, the existing property tax cap could be modified to maximize relief for local taxpayers across the state.

The report notes that New York shifts more of its Medicaid costs to local government than any other state—a system widely regarded as dysfunctional because it puts a disproportionately high burden on localities with poorer residents and weaker tax bases.

Several proposals for eliminating the local payments have been advanced in recent years, but Hammond argues that none of them has fully confronted the complexities and trade-offs of a takeover by the state.

“The local share of Medicaid has evolved into something that’s hard to defend, but also hard to unwind,” writes Hammond. “Because the current system distributes costs so unevenly, any solution must therefore distribute relief unevenly. … Leaders committing to this path must be prepared to grapple with tough choices for years to come.”

The Empire Center, based in Albany, is an independent, not-for-profit, non-partisan think tank dedicated to promoting policies that can make New York a better place to live, work and raise a family.

You may also like

Personal Care Spending Eight Times Higher in New York Than National Average, New Report Shows

New York’s Medicaid program spends roughly $12 billion per year on in-home “personal care” for the elderly and disabled. Read More

Budget Testimony: Dangerous Misplaced Priorities on Health Care

In his spoken testimony, Hammond had intended to highlight key shortcomings of the governor's budget, including its lack of a plan to investigate the state's pandemic response Read More

New York Spends More than All Other States on Education and Medicaid

New York’s spending on education and Medicaid will leave a hole in the budget after federal COVID relief money runs out Read More

NYS Reduced Funding for Public Health in Decade Before Pandemic, Expert Says

Sharp reductions in state funding for core public health functions over the past decade may have weakened New York’s defenses against the coronavirus pandemic, according to testimony delivered today by Bill Hammond, the Empire Center’s senior fellow for health policy. Read More

Report: Cuomo’s Medicaid Reforms Are Breaking Down

The budget crisis in New York’s Medicaid program stems from the failure of a key cost-control measure adopted during Governor Cuomo’s first term, according to a new report from the Empire Center for Public Policy. Read More

Local New York Property Taxes Ranked by Empire Center

Residents of the Western New York village of Sloan had the highest effective property tax rate in New York (outside New York City and Nassau), according to Benchmarking NY, the Empire Center’s annual rundown of local property tax burdens. Read More

Local New York Property Taxes Ranked by Empire Center

Benchmarking NY uses data from the state comptroller’s office to calculate effective tax rates–combined county, municipal and school taxes as a percent of market value–for thousands of localities across the state during 2017, excluding only New York City and Nassau County. Read More

Medicaid Drug Spending Surge Driven Mostly by Enrollment, Not Prices

From 2014 to 2016, New York’s Medicaid program saw a surge in drug spending that Governor Andrew Cuomo blamed on “abusive” behavior by drug manufacturers. A new Empire Center issue brief shows that, after accounting for rebates, the surge was smaller than Cuomo described, and that it was mostly driven by enrollment growth. Overall, the report finds that price increases accounted for about one-fifth of the spending surge, while enrollment accounted for four-fifths. 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!