As New York Faces Big Medicaid Cost Overruns, Cuomo Stays Mum

Date : 11/20/2019 @ 10:57PM
Source : Dow Jones News

As New York Faces Big Medicaid Cost Overruns, Cuomo Stays Mum

By Jimmy Vielkind 

Expenses in New York's Medicaid program are running at least $3 billion over budget, but the administration of Gov. Andrew Cuomo has so far said little about its plans to deal with the issue.

Administration officials are three weeks past their legal deadline to release a midyear budget report, which will include details about the overruns. The delay in disclosure has left advocates and lawmakers wondering about Mr. Cuomo's plans for the Medicaid program -- the state's largest expenditure -- and the possibility of immediate service cuts.

"What we expect to be dealing with in the coming fiscal year is on the scale of billions," said Assemblyman Richard Gottfried, a Democrat from Manhattan who chairs the chamber's health committee. "Paying for health care in New York is expensive. So when you talk about a 5 or 10% cut in the program, you really can't do that without causing serious damage."

A representative for Mr. Cuomo deferred comment to the administration's Budget Division, whose spokesman Freeman Klopott wouldn't say if the state would make midyear service cuts or explain why the midyear report hasn't been posted.

Budget Director Robert Mujica told reporters in September that Medicaid spending was a concern, but that the administration was preparing a budget that doesn't raise taxes. In a statement, Mr. Klopott said the administration was "developing a plan that will fix the structural imbalance while also continuing high-quality care for more than six million New Yorkers."

After taking office in 2011, Mr. Cuomo, a Democrat, established a cap on the allowable growth in the Medicaid program and won legislative approval for the state Department of Health to reduce spending if outlays exceeded the set limit. According to Bill Hammond, health policy director for the fiscally conservative Empire Center for Public Policy, this year's cost overruns were first disclosed in a May fiscal plan update.

That document said the Medicaid program only stayed within the cap last year by pushing a $1.7 billion payment from March into April, when a new fiscal year began. That overrun carried into the current fiscal year and has only been exacerbated by increasing enrollment in long-term care programs and payments to distressed hospitals, the state's Budget Division said in an information statement posted in October.

That document estimated Medicaid spending was between $3 and $4 billion above its allotted rates. It said the administration would provide more details in an update due Oct. 30, including whether the state would pare spending in the next few months, and how the overruns would affect an overall $4 billion budget deficit projected for the next fiscal year.

More than 6 million New Yorkers get health care through Medicaid. Not accounting for the overruns, the state Health Department projected it would spend $21.7 billion on Medicaid in the fiscal year that ends in March 2020.

Mr. Hammond said the Medicaid situation would cause the state's deficit to expand. He faulted the Budget Division for holding back the midyear update, which by law should have been posted on Oct. 30. Mr. Cuomo has failed to meet the deadline every year that he has been governor.

"We're so dependent on them to tell us what's going on, because they have more information than anyone else," Mr. Hammond said. "When you find out they've been holding that back and actively distorting facts it pulls the rug out from everybody."


(END) Dow Jones Newswires

November 20, 2019 17:42 ET (22:42 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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