It’s always a good idea to get back to basics when a topic becomes more and more complex as the years move along. That is the case with New York State’s Medicaid program. And, during the current coronavirus crisis, it is especially important to understand the necessity of such a public program to ensure everyone has access to healthcare during an infectious disease outbreak. About one-third of the state’s population of – 19.5 million people – is covered by Medicaid.
The federal government established Medicaid in 1965 to provide health insurance to poor and low income families and individuals and to disabled children and adults. Each state administers its Medicaid program and receives federal matching dollars. In New York’s case, that is about 50 percent; many other states receive a higher federal match.
New York has witnessed increasing enrollment in Medicaid, especially since the state expanded its program under provisions of the Affordable Care Act. According to the United Hospital Fund’s Medicaid Institute, enrollment increased by more than 36 percent between 2009 and 2015, though much of this population was inexpensive to cover. For example, children account for 37 percent of the Medicaid population, but less than 20 percent of the Medicaid expenditures. Members who are eligible for both Medicaid and Medicare comprise 13 percent of the total population, but generally represent the most medically complex patients and therefore incur higher costs. About half of all Medicaid dollars are spent on long-term care, like nursing home and home care services.
Who Are Medicaid Recipients?
The majority of Medicaid recipients are individuals we encounter in our daily lives – grandparents, neighbors, friends, children, and even some co-workers. Contrary to popular belief, the vast majority of Medicaid enrollees – 87 percent – are children, the elderly, the disabled and working-age adults with jobs. The Kaiser Family Foundation’s website features the stories of Americans who are Medicaid recipients and how this program serves as a lifeline.
New York’s Medicaid program is quite comprehensive compared to other states. Benefits include regular exams, immunizations, doctor and clinic visits, relevant medical supplies and equipment, lab tests and x-rays, vision, dental, nursing home services, hospital stays, emergencies, and prescriptions. Costs for long-term care either provided in a nursing home or in a patient’s home are by far a major driver of the program’s escalating price tab in recent years. Enrollment in and the cost of the state’s managed long-term care program has been growing at about 13 percent per year.
Funding Is Fragile
Governor Cuomo’s 2020 – 2021 state budget proposes cuts and changes to the Medicaid program in order to close a $6.1 billion budget hole. His office estimates that about $4 billion of the total deficit is attributable to Medicaid expenses. The governor formed a Medicaid Redesign Team II (MRT II) as the venue through which the state will find $2.5 billion in Medicaid savings in the upcoming state fiscal year and will ensure that Medicaid spending in future years stays within the global Medicaid cap. The cap was a recommendation forwarded by the MRT I when it convened in 2011. At that time, the state was facing a $10 billion deficit. The cap, which is tied to the Consumer Price Index, restricted Medicaid spending growth to about four percent annually. For the most part, it has worked, until recently. The MRT has a very short window of time in which to present its recommendations for savings to the governor and legislature so the recommendations can be incorporated into the 2020-2021 state budget.
It is difficult to predict, at this time, what the MRT will recommend, but hospitals certainly cannot absorb any more cuts to Medicaid reimbursement. On January 1, 2020, the state health department instituted an across-the-board one-percent reduction in Medicaid payments to providers through the first quarter – March 31, 2020. It is a total reduction of $124 million. Those most affected by continuing Medicaid cuts are the most vulnerable New Yorkers among us. We hope the governor and state legislators keep the “faces of Medicaid” in mind, as they deliberate the budget and make recommendations for changes to the Medicaid program. About six million New Yorkers’ access to healthcare hinges on their decisions.