New York’s ballooning Medicaid cost stems from poor budgeting: watchdog

The rising cost of New York’s Medicaid program is tied to poor budgeting, according to two new reports released Wednesday.

Reports from two separate fiscal watchdog groups, the Empire Center of New York and the Citizens Budget Commission, detail the state’s declining efforts to curb spending that has left the health care program at a deficit.

Spending totals for New York’s program has historically outranked other states, even exceeding the national average.

The Cuomo administration implemented an inflation-based cap on program spending in 2011, which both reports acknowledge to have been effective. But, they also note in 2016, efforts to control costs trended downward overall enrollment plateaued, and individual enrollee costs ballooned.

The Citizens Budget Commission’s analysis shows between 2016 and 2018, individual recipient costs grew from $9,973 to $11,529 — due to minimum wage increases for service providers, older people using long-term care facilities and hospitals on the fiscal decline.

New York’s Medicaid program now covers over 6 million residents and is projected to reach $74.5 billion in 2019, in total costs split between the federal government, state and local governments.

But this year, the Cuomo administration delayed a $1.7 billion Medicaid bill in March 2019 by three days.

Thus the payment was pushed off into April 2019, and transferred the issue to be dealt with in the 2020 state budget.

Andrew Rein, president of the Citizens Budget Commission, said the $1.7 billion payment postponement in 2019 will impact New York’s four year financial plan — between the years 2020 and 2023— reflecting a $9 billion shortfall.

“You didn’t save any money, because you still owe it. The state actually papered over the problem,” Rein told The Post.

The group’s report recommends either redesign and cut back on the existing Medicaid program, curb economic development spending or refocus education aid spending to specifically target high need districts.

“They completely overshot their limit and kept that quiet. They didn’t acknowledge they were in trouble, and instead quietly delayed the payment … they’re running a deficit. By delaying payments, in the long run it will make things worse,” said Bill Hammond of the fiscally conservative Empire Center, who recommends the state return to practices pre-2016,

“The way the global cap works is when spending goes over the cap, the health commissioner and budget director … have unilateral authority to control costs. They failed to do that last year.”

“Medicaid spending is variable and is responsive to the same factors that are driving national health care expenditure trends. When the governor took office, Medicaid spending was growing by double digits. The State was able to reign in those costs to stay within the Medicaid Global Cap of 4% or less,” Cuomo spox Jason Conwall said.

“We continue to monitor Medicaid spending patterns and evaluate year end results for future updates to State Financial Plan. We are also working on options to reduce spending to stay under the Global Cap as we prepare the Executive Budget for FY 2021 that will be released in January and by law must be balanced.”

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