Governor Ho-Chol has lifted the brakes on Medicaid, allowing state spending on safety-net health care programs to increase more than twice as fast as normal during the Cuomo administration.
Hochuls 2024 budget proposal It calls for a 9% increase in state contributions to Medicaid, or $2.9 billion, following a surge of 14% in fiscal 2023. This compares with an average growth rate of 4% from 2011 to 2022. (see first chart).
Forecasts for future states are also rising. Compared to the January 2022 estimate, spending is expected to increase by about $2 billion in 2024 and about $10 billion over the next four years. These additions come on top of Medicaid spending per capita, which is already the highest in the state.
These higher costs are due in part to pandemic-related disruptions, but also Ho-chol’s policy choices. This includes higher reimbursement fees for hospitals and nursing homes, increased subsidies for struggling health care providers, and higher wages for home care assistants.
Medicaid is a safety net health plan for the poor and disabled, funded jointly by federal, state, and local governments. Total state contributions for fiscal 2023 were $31.5 billion, surpassing school aid as the single largest item in the state budget. This is probably the first time.
In another historic milestone, the financial plan forecasts total Medicaid spending. This includes federal, state, and local contributions and other funds not typically shown on state reports. surpass $100 billion 2024.
To help pay for this increased spending, Hochul will intercept an estimated $642 million or more in federal aid that previously flowed to New York City and county governments to offset some of Medicaid’s costs. I’m proposing. This effectively reverses the freeze on local shares that has been in place since 2015. This is one of the most significant Medicaid reforms in recent history.
Former governors have generally sought to curb Medicaid spending, especially early in their terms, recognizing that uncontrolled growth would unbalance the state’s finances, especially during a recession.
Former Gov. Andrew Cuomo, during his first term, “Global Cap” This limited most states’ Medicaid spending growth to a rolling average of medical inflation rates.This has kept the program’s budget relatively stable for most of his administration, until 2019 due to loopholes and fiscal gimmicks that caused Cuomo and Congress to rush to fix when the pandemic arrives.
In her first budget last year, fiscal 2022, Hochul and Congress agreed to loosen the global cap by switching to a different benchmark—a federal forecast of nationwide Medicaid costs. This more than doubled her allowable growth rate.
Hochul has attempted to pursue several cost-cutting measures left over from the Cuomo era, with limited success. However, she appears to have chosen to avoid conflict with politically powerful medical actors such as hospital associations and labor unions.
The recent history of Medicaid has been complicated by the pandemic. Costs plummeted during fiscal 2021 as states ordered a moratorium on elective procedures and consumers avoided using the health system whenever possible.
Healthcare costs have generally rebounded once restrictions are eased in 2022. Medicaid was even more shocked by his two emergency measures in Washington. One increased federal matching aid to the program and the other required states to keep current beneficiaries regardless of changes. Falling incomes caused a temporary surge in enrollment across the country. new york roll It is expected to peak in June at 7.9 million, or 40% of the state’s population.
Under federal law passed in December, the “continuous coverage” requirement is set to expire in March, and states are expected to gradually reduce rolls over the next 12 months. Meanwhile, additional Medicaid funding provided by Washington in an emergency (worth about $3.6 billion annually) will be phased out by December 2023.
State officials 1.2 million fewer subscribers or 16% over the next two years – approaching pre-pandemic levels. Still, the governor’s budget shows that the state’s Medicaid budget will continue to rise through the foreseeable future, falling to 18% over the next three years Increased has.
It’s worth remembering that the governor’s proposal is the starting point for negotiations with Congress. Lawmakers and interest groups have already pledged to push for significant additional increases in Medicaid fees and wages.
Unless Ho-Chol imposes curbs (which is the traditional role of a governor), New York’s Medicaid spending could skyrocket even faster than she planned.
