By Tom O'Mara
Several months ago in this column, I highlighted warnings about a coming storm in New York’s system of Medicaid.
In early September, I pointed to a little noticed report from the state Budget Division that Medicaid spending “continues to exceed expectations.” Shortly thereafter, the state comptroller revealed that the state Medicaid program made more than $100 million in duplicate payments and reiterated the longstanding need to “eliminate this waste” and “improve efficiency.“
All of which presented the chance to restate long-held criticisms that Medicaid remains a system too often undermined by fraud, mismanagement, and waste. Overall annual spending on Medicaid approaches $80 billion, nearly one-half of New York’s entire state budget. Medicaid watchdogs note that the system now provides benefits to at least one-third of all state residents.
Consequently, I wrote back in September, “As enrollment figures continue to soar, it becomes clearer by the day that counties and local property taxpayers simply cannot sustain this burden.”
Little did we know, because since September reports have surfaced that the Medicaid program has exploded and leaves the state with a $6-billion-plus budget deficit heading into 2020. The Medicaid program alone currently accounts for a $4-billion shortfall and multi-billion gaps well into the future.
According to one analysis from the Empire Center, “The remarkable thing about the state’s multi-billion-dollar Medicaid crisis is that it is almost entirely the result of the Cuomo administration’s own actions…The problem is not a shortfall of revenue, but a spike in spending – which is the direct consequence of policy changes and political deals made by Cuomo and his team.”
Many of us have warned many times across the past decade that New York’s Medicaid system overreaches as a public policy, overspends as a government program, and is mismanaged. A recent Buffalo News editorial references this longstanding criticism by recalling a 2014 report from the Henry J. Kaiser Family Foundation showing that New York State administered America’s eighth-most costly Medicaid program with a per-enrollee cost 36% higher than the national average. California’s system was the fourth least expensive, by contrast.
Furthermore, the current system places an enormous burden on local property taxpayers. County executives, mayors, and other local officials throughout the Southern Tier and Finger Lakes regions, and statewide, continually point to Medicaid as their most burdensome and costly unfunded state mandate.
Now it’s out in the open: Medicaid is a fiscal train wreck barreling out of control toward future generations of state and local taxpayers. Addressing this crisis now becomes the defining issue of the 2020 legislative session. It presents an opportunity to remake the system into one that is less costly, more efficient and effective for those it is truly meant to service, and more responsible to taxpayers. It presents an opportunity to put in place badly needed and long-overdue spending controls, and get rid of the mismanagement. Right?
Recently, when asked about the crisis, the Democrat leader of the State Assembly said that “when there's a concern about having enough money, the two options always are do you cut spending or do you raise revenue and for us in the Assembly we always believe in raising revenue." The Democrat leadership of the state Senate is taking a wait-and-see approach. Governor Cuomo plans to reveal his response early next year.
Ominously, what we’re not hearing is this: No new taxes.
In fact, my fear is that the state Assembly Speaker may be speaking for them all when he says the first place to turn to address this crisis resulting from overspending and mismanagement is to raise taxes, again, on already overburdened taxpayers.
Typical New York.
