The annual cost of New York’s public health insurance for the needy is set to shatter $100 billion for the first time — and the unrelenting migrant crisis could soon trigger even more of a spike, documents show.
The state’s Medicaid program currently enrolls 7.8 million residents, with the staggering price tag for 2023-24 set at $108 billion, according to New York budget estimates.
That’s nearly $10 billion more than last fiscal year’s $99 million budget.
And beginning in January, the program will start providing medical coverage to an estimated 25,000 undocumented immigrants age 65 and over who are ineligible for Medicare, the federal health insurance program for senior citizens — at an estimated cost of $171.million.
“Public health insurance coverage for asylum seekers and other migrants may drive further costs to the State,” Gov. Kathy Hochul’s budget office acknowledged in her executive spending plan earlier this year.
The massive bill for the state’s Medicaid program is split between the federal, state and local governments.
The state picks up a third of the cost to finance the program, or $35.56 billion this fiscal year, the feds provide $64.6 billion, or 59%, and New York City and other counties chip in $8.5 billion, or 8%, for the $108 billion combined total.
The federal government has strict rules that bar newly arrived migrants from qualifying for Medicaid, with the exception of emergency care.
“The state’s share [of Medicaid spending] is on track to be 53 percent higher in 2024 than it was in 2019, which compares to 10 percent growth in the five years before 2019,” the Empire Center for Public Policy’s Bill Hammond said in a recent analysis.
The state Medicaid bill also is more than double the $17.7 billion borne in fiscal year 2011.
Hammond said the fiscal year 2023-2024 state budget approved in April appears to increase the state share of Medicaid spending by $4.2 billion or 13 percent — an extension of a trend of explosive growth in the safety-net medical program during the COVID-19 pandemic.
The bulk of the added spending will go toward higher fees for various groups of providers that treat Medicaid recipients.
Hospitals receive bumps of 7.5 percent for inpatient care and 6.5 percent for outpatient care. Nursing-home providers also received a 6.5 percent increase.
The budget also provides an additional $72 million to the State University of New York’s three hospitals — Upstate Medical Center, SUNY Downstate and Stony Brook University — to cover “uncompensated” patient care, too.
“This trend has pumped billions more into what was already a costly health-care system by national and international standards,” Hammond said. “New York spends more per capita on Medicaid – and on health-care generally – than any other state.”
Federal policy encouraged New York and other states to keep residents on the Medicaid rolls during the COVID-19 outbreak as unemployment spiked.
But state officials are required to redetermine eligibility for all Medicaid recipients post-pandemic after the feds ended the COVID-19 emergency declaration, which is expected to reduce the number of insured in the program to 6.9 million from 7.8 million, a drop of 900,000.
Still, “the uncertainty around future Medicaid enrollment puts risk on Medicaid spending in future fiscal years,” Hochul’s Division of the Budget noted in her executive spending plan.
“The Medicaid program continues to grow beyond indexed growth, further challenged by Medicaid enrollment that is no longer assumed to return to pre-pandemic levels.”
Controlling Medicaid spending is particularly changing given the aging of New York’s population, state budget officials said.
“The State’s population is aging and driving significant growth in the Medicaid program,as costs for those who need long term care are ten times that of a typical Medicaid enrollee,” Hochul’s executive spending plan said.
“Additional fiscal pressure is exerted by inflation and increased labor costs.”
Asked about the record-shattering Medicaid spending, Hochul’s budget office said, “Governor Hochul has passed two consecutive balanced budgets that invest in health care while putting record funding in reserves. Estimated costs for increased enrollment are budgeted in the Financial Plan through FY2025.”
Budget officials noted that Medicaid enrollment increased nearly 1.6 million since March of 2020 and the steep rise in unemployment triggered by COVID-19 pandemic was the primary factor.
State officials said they do not track how many of the 7.9 million New Yorkers on Medicaid are undocumented individuals.
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