Gov. Andrew M. Cuomo, as is his habit, has been serving up informational snacks to New Yorkers for the past few weeks – appetizers meant to pique interest in Wednesday’s State of the State address. All are in some way interesting and worthy of discussion.
What he hasn’t fully dealt with, though, is the most urgent item on the state’s 2020 agenda: Closing a $6.1 billion budget deficit driven by the state’s Medicaid program. That will be a more painful sell than the 30 proposals he has teased since mid-December, but it will have a great impact on the state’s residents, including its Medicaid clients and their health care providers.
The $6.1 billion shortfall was identified in late October – $2 billion higher than had been estimated only six months earlier. Without action, the deficit will grow worse in the coming years, the state reported. Two-thirds of the gap – $4 billion worth – is tied to Medicaid, the joint federal-state program that provides health care to the poor.
Cuomo made a move last week to lighten the load, but not by much. His administration announced that it will cut Medicaid payments by 1% in 2020 for a savings of $124 million in the final quarter of the current fiscal year, which ends on March 31, and $496 million in future years. With that, hospitals, nursing homes, doctors, pharmacists and other providers will see their revenues decline.
But $496 million fills only 8% of a $6.1 billion hole, or 12% of the $4 billion attributable to Medicaid. It’s a start, but it leaves the vast majority of the job to other actions, including cuts or efficiencies to the program or new taxes. The New York program is expected to cost local state and federal governments $74 billion this fiscal year.
And while it’s fair to predict that just about all New Yorkers are going to be helping the state climb out of the hole it has dug, it’s also important to note that providers already work at a deficit when caring for Medicaid patients.
A big part of the answer must be to re-engineer New York’s Medicaid program. Providing health care to the poor and indigent is a fundamental responsibility of a decent society, but for it to succeed over the long haul – and for the state not to continue hemorrhaging population – the costs must be reasonable. New York’s demonstrably aren’t.
The Henry J. Kaiser Family Foundation reported in 2014 that New York has constructed the nation’s eighth-most costly Medicaid program, at a per-enrollee cost of $7,806. In the nation’s fourth most populous state, where more than 6 million residents make use of Medicaid, that’s a problem.
The report also shows that New York’s costs are 36% higher than the national average of $5,736 and that there is room for a caring state to reduce its costs: The same Kaiser report showed that California, as blue a state as New York, came in as the nation’s fourth least expensive Medicaid program, at $4,193 per enrollee.
Medicaid has grown in New York and many other states because of its role in funding the Affordable Care Act. The average age of the state’s population is also rising, pushed up as younger families move away.
These are just some of the factors that Cuomo will have to consider as he moves to right the state’s finances. But this shouldn’t be a short-term fix. This is the governor’s chance to stabilize the health of New York’s Medicaid program for the long haul, while bringing its costs in line with – or at least substantially closer to – the national average.
As to the morsels of information that Cuomo has been serving up, many are worthy of the state’s time, including the announcement Monday that would turn Canalside’s North Aud Block into a lively center of residences and commercial space.
Other proposals include:
• “Reimagining” the Erie Canal
• Combatting robocalls
• Banning flavored vaping products and ads directed at youths
• Protecting consumers from abusive debt collectors, too many of whom have made a home in Western New York
• Lowering prescription drug prices
• Preventing criminals who commit a serious crime in another state from owning a gun here
It’s a full and interesting docket, but it can’t be allowed to distract attention from the urgent matters of Medicaid and the budget deficit. Cuomo and legislators have a difficult and serious job ahead.