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TALKING POINTS
July 12, 2006
ADDRESSING NEW YORK’S MEDICAID BURDEN
According to published reports, the State of New York spends more on Medicaid than any other state in the nation, including more than California and Texas combined. Because of the sharing formula utilized in New York through 2005, approximately one quarter of all expenses associated with providing Medicaid assistance in any county were borne by that county. Under that formula, the federal government paid for 50% of New York’s Medicaid program, with the state and each county sharing the remainder.
This system created financial nightmares for many counties as healthcare costs skyrocketed during the past ten (10) years. For example, New York State Comptroller Alan G. Hevesi recently reported that the average annual Medicaid increase per county (outside of New York City) was 8.6% from 1999 to 2003, leading to the assumption that the average upstate county saw its Medicaid costs increase by forty-three percent (43%) in five (5) years. Additionally, as reported by Comptroller Hevesi’s Office, between 1995 to 2005, local property taxes increased by 60%, more than twice the rate of inflation, and during the last five (5) years alone, property tax levies increased by 42%. While not the sole reason for any tax increase, it is easy to see the correlation between expanding Medicaid costs and the burden that it places on New York taxpayers
To help alleviate the cost placed on each county; in 2005 New York’s Legislature imposed a cap on the amount of annual increase a county will have to pay for its share of the burden, which cap commenced in 2006 (the “Medicaid Cap”). While the Western New York Coalition for Progress commends the Legislature and Governor for taking a first step, the imposition of the Medicaid Cap does not go far enough in addressing the root problem – an exploding Medicaid burden on county and statewide taxpayers. All the Medicaid Cap does is limit the amount of annual increases counties face; it does not lessen the overall burden but instead shifts that burden to the state, thereby delaying the overall impact to taxpayers. In the end, every New York State taxpayer will pay a greater share for Medicaid’s ever-increasing burden as the state now assumes a greater share of the total responsibility.
Therefore, the Western New York Coalition for Progress calls on New York’s Legislature to fully examine the Medicaid program offered in New York in order to modernize a system which was not created to be a comprehensive statewide healthcare program for all, but instead a system to provide needed benefits to those who can least afford it. Specifically, we call on New York’s Legislature, Governor, and major gubernatorial candidates (whichever should be elected) to enact new enforcement procedures to prosecute to the full extent those who perpetuate Medicaid fraud, and review and overhaul the system to ensure that high-quality healthcare is provided to those who need it but under a system which is similar to the average level of coverage provided by other states in our nation.
Until such change is effectuated, the Western New York Coalition for Progress supports state legislation which should offer some relief to county and statewide taxpayers by shifting healthcare costs to large, multi-national employers. We agree with the principle that employers, especially large corporations, should not receive a business advantage over their competitors by shifting their employees’ healthcare costs to a state or municipality.
Such legislation, if effectuated, will reduce Medicaid costs to the state and counties by reducing the amount of participants in the Medicaid program, which will in turn reduce the costs passed on to state and local taxpayers.
Like the Medicaid Cap, passage of such legislation will not solve New York State’s Medicaid problem, but it is one more step that needs to be taken to help lessen the burden taxpayers now pay for a flawed system. Until that system is repaired, New Yorkers will shoulder the burden for a system that provides high-quality healthcare to those who could not otherwise afford it, but a system which is ultimately not financially feasible in the 21st Century.
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