New York’s per-recipient Medicaid spending has soared to the nation’s third-highest rate, a sign of fiscal trouble for one of the state’s most important programs.

New York’s version of the safety-net health plan spent an average of $12,553 for each enrollee as of 2018, the most recent year for which nationwide data are available.

That was the third-highest amount of any state, behind North Dakota and Maine, and 44 percent more than the national average (see first chart below).

It had also jumped by 26 percent in just two years – a further indication of the Cuomo administration’s changing posture on Medicaid (see second chart below). Per-recipient spending declined during Governor Cuomo’s earlier years in office, when Governor Cuomo was emphasizing cost control, but has climbed to new heights since 2016.

Source: CMS. CHIP = Child Health Insurance Program.

New York’s per capita Medicaid rate, which measures the average amount spent for each resident of the state, is also rising rapidly. On this benchmark, New York easily outranks every other state – and has widened its lead in recent years. That’s partly a function of the state’s generous eligibility rules for the program, which covers roughly one-third of the state’s population.

Source: CMS. CHIP = Child Health Insurance Program.

A likely contributing factor behind both trends is the explosive growth of home-based long-term care for the elderly and disabled – an area in which New York is a nationwide outlier. This is especially the case with so-called personal care, which provides non-medical help such as feeding, bathing and housekeeping.

When Cuomo took office in 2011, New York accounted for 23 percent of nationwide Medicaid spending on personal care, even though it has 6 percent of the population. By 2016, New York’s share had surged to 40 percent – and its spending has more than doubled since then.

Reining in personal care was a focus of the governor’s Medicaid Redesign Team this spring – and cost-control measures focused on the program were part of the state budget approved by lawmakers in April. Many of those changes have yet to take full effect, and there are efforts in the Legislature to roll some of them back.

The per-recipient and per-capita figures highlighted in this post are based on spending and enrollment data from the federal Centers for Medicare & Medicaid Services, known as CMS, which are useful for making nationwide comparisons.

However, they sometimes differ significantly from numbers generated by the state. For reasons that are unclear, the state Health Department typically reports higher enrollment and lower spending than CMS does. Also, CMS data often reports Medicaid numbers in combination with the Child Health Insurance Program, which is known as Child Health Plus in New York. The per-recipient spending rate for 2018 is about $1,000 lower if calculated based on state data instead of federal data – and the jump from 2016 to 2018 is about 14 percent instead of 26 percent.

These disparities may in part be a byproduct of the state’s unorthodox Medicaid bookkeeping as the program repeatedly ran over budget in recent years. Rather than taking action to control cost, the Cuomo administration repeatedly resorted to delaying payments from one fiscal year to the next. This practice, which was initially hidden from the Legislature and the public, ultimately led to a significant budget deficit last year.

The program’s pre-existing fiscal woes are now being compounded by the pandemic-induced recession. Although Washington is providing New York with an extra $2.2 billion in Medicaid funding as a coronavirus relief measure, that won’t nearly close the state’s multi-billion dollar budget hole. Meanwhile, Medicaid enrollment is surging as a result of the economic downturn and widespread job losses.

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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