Gov. Andrew Cuomo threw down the gauntlet in a bid to close the state’s yawning $6 billion budget deficit, suggesting that New York City and other local governments cough up more for a massive Medicaid bill.
“The situation is unsustainable,” Cuomo said during his annual State of the State speech Wednesday in Albany.
At the heart of the fiscal hole are the exploding costs of the state’s $77 billion Medicaid program for the needy, the costs of which are meant to be split between the federal, state and local governments.
In order to help local governments abide with a state-imposed 2 percent property tax cap, the governor and the Legislature agreed six years ago to pick up the added costs for the Medicaid program and freeze payments made by New York City and the counties.
Thanks to an expansion of Medicaid allowed as part of the Affordable Care Act, 95 percent of New Yorkers now have medical coverage.
But now, surging Medicaid costs account for about two-thirds of the state’s projected $6 billion shortfall for the 2020-2021 fiscal year.
“We now face federal cuts and we must correct for cost increases incurred when local governments were held harmless by this state for Medicaid increases,” said Cuomo, rattling off some of the tabs.
“We’re paying $177 million on behalf of Eric, $175 million on behalf of Westchester, $2 billion on behalf of the City of New York to cover local costs,” he said.
“It is too easy to write a check when you don’t sign it,” cracked Cuomo. “Just ask my daughters, who are here today.”
Despite the tone, a Cuomo official insisted after the speech that the governor would not undo the freeze, but simply wants greater cost controls and oversight of Medicaid administration at the local level.
But Mayor Bill de Blasio was wary, saying that he was “concerned for sure” about the prospect of Cuomo balancing the state budget on the back of the city.
“I am certain the state has some fiscal challenges, I respect that,” said Hizzoner, in Albany for the address. “But my first response is, ‘OK, let’s all sit at the table and figure how we can all save money together,’ and to make sure the common goal is to not take health services away from New Yorkers who need them.”
Budget watchdogs applauded Cuomo for confronting the Medicaid problem, but said it would be a mistake to force local governments pay a greater share of the costs. New York is one of the few states that compels its local governments to kick in for Medicaid.
They said it’s smarter to cut costs because increased spending on things like home care is at the root of the problem.
“The state needs to control the costs and not shift the costs to local governments,” said Bill Hammond, a health care analyst with the Empire Center for Public Policy.
He said there’s a “conflict of interest” because local government officials are less likely to curb costs or deny coverage — possibly angering the powerful health-care workers union Local 1199 SEIU and other health-care interests — when they’re not footing the bill
Said Andrew Rein of the Citizens Budget Commission, “He [Cuomo] talked about Medicaid and the need for savings and he’s right on that.”
But Rein, too, said it would be counterproductive to simply stick the city with the bill, calling Albany’s takeover of a larger share of Medicaid costs one of Cuomo’s “signature achievements.”