Medicaid in New York provides health insurance to millions of low-income residents, elderly individuals, and people with disabilities, representing the largest single program in the state budget. This page covers CBC’s work on Medicaid spending growth, the Medicaid Global Cap, long-term care and personal care services, program transparency, and strategies for health system transformation.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
The State should develop and implement a Medicaid savings plan that targets high and growing cost services.
The State should use proceeds from the time-limited Managed Care Organization (MCO) tax for one-time health system improvements.
The State should vastly improve Medicaid data transparency and planning.
The State should release the findings and recommendations of the CFHC immediately.
The State should develop and implement a Medicaid savings plan that focuses on the cost and growth areas, long term care and personal care.
Key Data
Medicaid spending is slated to grow at 7.0 percent annually from fiscal year 2025 to fiscal year 2028, and total spending will exceed $100 billion in fiscal year 2025.
The State budget director recently stated that costs for the Consumer Directed Personal Assistance Program (CDPAP) have grown 1,200 percent in the past decade.
The Medicaid Redesign Team (MRT) was tasked with identifying $2.5 billion in savings for fiscal year 2021, but its final recommendations totaled only $1.6 billion.
New York State's fiscal year 2026 budget proposals fail to address the structural budget gap and rely on unsustainable spending increases, including in the Medicaid program. To ensure long-term fiscal stability, the state must implement a targeted Medicaid savings plan and utilize Managed Care Organization tax proceeds for one-time health system improvements rather than recurring expenses.
Recommendations related to Medicaid Redesign
The State should develop and implement a Medicaid savings plan that targets high and growing cost services.
The State should use proceeds from the time-limited Managed Care Organization (MCO) tax for one-time health system improvements.
The State should vastly improve Medicaid data transparency and planning.
The State should release the findings and recommendations of the CFHC immediately.
The State should develop and implement a Medicaid savings plan that focuses on the cost and growth areas, long term care and personal care.
New York's Medicaid program faces rapidly rising costs due to elevated enrollment and utilization, with total spending projected to exceed $100 billion this year. To ensure sustainability, the state must implement comprehensive savings initiatives, such as targeting high-growth areas like long-term care and improving data transparency, to keep spending within the Global Cap.
Recommendations related to Medicaid Redesign
The State should identify savings that maintain quality services to those in need, as it cannot sustain 7 percent annual spending growth in its largest program.
The State should manage Medicaid spending within a stronger Global Cap that applies to all State share costs and prevents the use of fiscal gimmickry.
The State should focus on accelerated growth areas such as long-term care and home- and community-based care to address unsustainable cost growth.
The State should require the Commission on the Future of Health Care to issue long-term cost savings recommendations this year to drive improvement and savings.
The State should improve Medicaid data reporting to inform further savings by amending Global Cap updates and publishing data in a timelier fashion.
Key Data
$100 billion
— Medicaid spending will exceed $100 billion this year, and will push far beyond that benchmark in the out-years.
600,000
— Medicaid enrollment in 2024 will be approximately 600,000 higher than pre-pandemic levels.
7.0 percent
— The State share cost of Medicaid is slated to grow at 7.0 percent annually from fiscal year 2025 to fiscal year 2028.
1,200 percent
— CDPAP costs have grown 1,200 percent in the past decade.
$6 billion
— The State recently received waiver approval to reinvest $6 billion in federal funds for system reforms.
New York should reconstitute its Medicaid Redesign Team into a Health System Transformation Team to improve healthcare access, affordability, and quality while ensuring fiscal sustainability. The state must also address the fiscal challenges posed by the addition of roughly 1 million new enrollees during the pandemic by identifying program efficiencies and fixing the global Medicaid spending cap.
Recommendations related to Medicaid Redesign
The State’s Medicaid Redesign Team should be reconstituted as a Health System Transformation Team with a mandate to make recommendations to improve healthcare access; affordability for individuals, businesses and the State; quality; and equity.
A Health System Transformation Team should identify specific initiatives that improve the effectiveness, efficiency, and equity of public health, primary and acute health care delivery, long term care, and behavioral health.
The Transformation Team also should identify efficiencies and changes to eligibility and program redesign to ensure Medicaid is fiscally sustainable.
The State should take steps to improve the program’s fiscal stability and outlook by charging the Transformation Team to identify Medicaid efficiencies, program improvements, and savings.
Further improvements are still needed in transparency, by bolstering the State’s reporting requirements, to coordinate care for the highest-needs enrollees, and to fix the State’s global Medicaid spending cap.
Key Data
1 million
— Number of new enrollees brought into the Medicaid program during the pandemic.
New York's proposed legislative budget increases Medicaid spending significantly, risking a return to pre-pandemic fiscal stress. To address this, the state should revive the Medicaid Redesign Team to identify efficiencies, fix the Global Cap, and develop a long-term strategy for improving health care delivery and equity.
Recommendations related to Medicaid Redesign
The State should revive the Medicaid Redesign Team (MRT) and expand its charge to Health System Transformation to identify additional efficiencies and program redesign.
The State should fix, rather than eliminate, the Medicaid Global Cap to ensure long-term fiscal stability.
The State should develop a long-term plan to improve the effectiveness, efficiency, and equity of New York’s public health, primary and acute health care delivery, long-term care, and behavioral health systems.
The state should revive and transform the Medicaid Redesign Team into a Health System Redesign Team to address ongoing structural budget gaps and improve transparency, as Medicaid spending has consistently exceeded budget projections. Additionally, the state must reject the elimination of the State-share Medicaid Indigent Care Pool and reverse the local sales tax intercept, both of which unfairly shift costs to local governments.
Recommendations related to Medicaid Redesign
Revive and transform the Medicaid Redesign Team into a Health System Transformation Team.
Reject the elimination of the State-share Medicaid Indigent Care Pool for public hospitals.
Reverse the $500 million local government sales tax intercept that was erroneously linked to Medicaid budget issues.
Fix the Medicaid Global Cap to ensure it is actually a cap and not subverted by disbursement deferrals.
Provide monthly expenditure reports for the Medicaid program to improve transparency.
Key Data
$2.5 billion
— Recurring savings the Medicaid Redesign Team was reconvened to identify.
$500 million
— The amount of the local government sales tax intercept that should be reversed.
$4.5 billion
— Amount in enhanced Medicaid funding provided by federal aid packages since March 2020.
$1.5 billion
— Likely additional enhanced Medicaid funding that the Executive has not yet included in the Financial Plan.
New York State faces significant budget gaps due to revenue shortfalls, requiring strategic adjustments to Medicaid spending and other local aid to maintain fiscal stability. By continuing Medicaid Redesign Team efforts and implementing targeted savings, the state can manage its financial obligations without resorting to excessively deep cuts to essential services.
Recommendations related to Medicaid Redesign
Medicaid Redesign Team efforts should continue in order to find additional savings starting in fiscal year 2022.
Given the size and recent growth of the Medicaid program, the State should be able to find savings in line with Executive Budget projections, which would still allow the state’s share of Medicaid to grow more than 4 percent annually.
Key Data
$100 million
— Medicaid savings that were less than planned in fiscal year 2021.
$1.5 billion
— Medicaid savings that are projected to be less than planned in fiscal year 2024.
$1.5 billion
— Increased Medicaid funding committed by the federal government for the period of January 1, 2020 to June 30, 2020.
$726 million
— Extended Enhanced FMAP funding through September 30, 2020.
New York's Medicaid program faces a significant structural gap, exacerbated by the COVID-19 pandemic and federal restrictions that limit the state's ability to implement planned cost-saving measures. To ensure fiscal sustainability, the state must continue the redesign efforts initiated by the Medicaid Redesign Team while navigating these new economic and legislative challenges.
Recommendations related to Medicaid Redesign
The State should include the Medicaid Redesign Team (MRT) recommendations in the budget, implementing those that do not risk federal funding immediately.
New York should lobby federal lawmakers to clarify and revise the COVID-19 response law to allow the state to implement planned cost savings.
The State should include transparency improvements to the Medicaid program to help prevent future budget blunders and allow the public to monitor the program.
The State should omit the provision for local share growth, as its inclusion would reverse an important achievement in State Medicaid finance policy.
The State should continue collaborative redesign and reform of the health care system to address persistent delivery challenges and ensure fiscal sustainability.
Key Data
$4 billion
— The structural gap in the Medicaid program for fiscal year 2020.
$3 billion
— The structural gap in the Medicaid program for fiscal year 2021 and beyond.
$1.6 billion
— The amount in savings recommended by the Medicaid Redesign Team for fiscal year 2021.
$4.5 billion
— The annualized value of the enhanced federal funding provided to the State.
$647 million
— The largest portion of the MRT savings package, which relates to savings in long-term care.
$474 million
— The amount of MRT recommendations that are likely to be prohibited under federal law.
The Medicaid Redesign Team's proposals fall short of the $2.5 billion savings target by $851 million and fail to address necessary transparency improvements or structural issues with the Medicaid Global Cap. While the plan includes some positive policy changes like reforming the Indigent Care Pool and adjusting personal care services, it leaves the state financial plan with a significant deficit.
Recommendations related to Medicaid Redesign
The State should improve transparency in Medicaid spending by providing data regularly, including spending data for all Medicaid agencies and unit costs of services.
The Executive and Legislature should amend the structure of the Medicaid Global Cap to ensure it functions as an effective annual limit on growth in State Medicaid disbursements.
The Executive and Legislature should commit to making fiscal and statutory details available promptly regarding the Medicaid Redesign Team's proposals.
The final negotiated budget should include fundamental fixes to the Medicaid program to ensure reforms meet fiscal goals while minimizing negative impacts on the state’s health care system and patients.
Key Data
$2.5 billion
— The savings target for the Medicaid program in fiscal year 2021.
$851 million
— The amount by which the Medicaid Redesign Team's proposals fall short of the savings target.
$890 million
— Recurring savings taken in fiscal year 2020 used to close the Medicaid budget shortfall.
$1.6 billion
— The total amount of savings included in the Medicaid Redesign Team's proposals.
$1.7 billion
— The value of a payment delay from March 2019 that went unreported for months.
$1 billion
— The amount of funding provided to hospitals serving predominantly Medicaid and uninsured patients through the Indigent Care Pool.
New York's Medicaid program faces significant fiscal challenges, with costs rising on an unsustainable trajectory that requires structural reforms to the Global Cap and targeted spending constraints. To ensure long-term sustainability without raising health care taxes, the state must improve transparency, adopt accurate accounting principles, and address high-growth areas like long-term care and supplemental payments.
Recommendations related to Medicaid Redesign
Make the Global Cap global by including all spending, ensuring all Medicaid costs are accounted for and managed within the cap.
Make the Global Cap a cap by following modified accrual accounting principles to prevent the use of payment deferrals to adhere to the cap.
Choose the right cap by indexing Medicaid spending to the rolling average of medical inflation and adjusting for enrollment changes.
Adhere to and improve the law requiring Medicaid spending transparency by publishing monthly reports and enhancing their content.
Focus on areas with high growth rates or extraordinary spending levels, such as long-term care, health homes, and the Consumer Directed Personal Assistance Program.
Target supplemental payments based on need to ensure they are sensitive to the financial condition of hospitals.
Do not raise health care taxes, as the current budget gap is a spending growth problem rather than a revenue shortfall.
Key Data
$2.5 billion
— The ambitious goal for State-share Medicaid savings identified by the Medicaid Redesign Team.
$1.7 billion
— The amount of payments deferred for three days into the next fiscal year to artificially adhere to the Medicaid Global Cap in fiscal year 2019.
$1,000
— The annual increase in health insurance premiums paid by the average commercially insured family in New York due to healthcare taxes.
50 percent
— The amount by which daily nursing home costs in New York are higher than the national average.
6 times
— The factor by which New York's personal care spending per capita was greater than the national average in 2016.
$500 million
— The cost for the health homes care coordination model in its first five years.
New York faces significant budget gaps driven largely by unsustainable Medicaid spending, necessitating targeted reforms to control costs without shifting burdens to local governments. The state must avoid relying on uncertain savings and instead implement prudent, publicly vetted measures to ensure long-term fiscal stability.
Recommendations related to Medicaid Redesign
The State should support appropriately targeted, prudent, and publicly vetted spending controls recommended by the Medicaid Redesign Team (MRT).
The Medicaid Redesign Team should examine high growth areas and spending where New York historically is an outlier, such as long-term care, personal care, and home care.
The State should reject any increase in the local Medicaid share, as counties and New York City have very limited control over the program.
The State should make efforts to eliminate the Medicaid deferral that was initially implemented at the end of fiscal year 2019.
Given Medicaid’s rising long-term care costs, the State should not remove incentives for New Yorkers to acquire long-term care insurance.
Key Data
$18.0 billion
— Amount of the five-year budget gaps attributed to previously unbudgeted Medicaid spending.
$2.5 billion
— Amount of Medicaid savings in the Executive Budget that are yet to be determined.
$1.9 billion
— Amount of Medicaid payments the Executive Budget proposes to permanently delay.
New York faces a significant fiscal imbalance driven by accelerating spending growth, particularly in Medicaid and education aid, which necessitates immediate action to restrain expenditures. To address these challenges, the state should prioritize structural reforms, such as reconstituting the Medicaid Redesign Team and focusing education aid on needy districts, rather than relying on tax increases.
Recommendations related to Medicaid Redesign
New York State should reconstitute the Medicaid Redesign Team to identify savings.
The state should adopt a holistic approach that evaluates policies to address high and rapidly rising long-term care costs and reforms Medicaid supplemental payments.
The Executive and Legislature should exercise powers granted under the Medicaid global cap to prevent Medicaid spending from exceeding budgeted amounts.
Key Data
$3.6 billion
— The amount of Medicaid supplemental payments that should be reformed to better direct funds to safety net hospitals.
6.1 percent
— The average annual increase in Medicaid State spending between fiscal years 2017 and 2020.
50 percent
— The amount by which New York's cost per Medicaid enrollee exceeds the national average.
$12.5 billion
— The amount of previously unbudgeted Medicaid spending that contributes to the total four-year State budget gap.
32 percent
— The growth of the State share of Medicaid long-term care costs from fiscal years 2015 to 2019.
New York State's practice of deferring Medicaid payments to adhere to the "Global Cap" obscures the program's true costs, resulting in a cumulative financial plan understatement of more than $9 billion. To reconcile this disconnect, the state must align its budget with actual costs by reducing Medicaid spending, slowing school aid growth, and cutting wasteful economic development programs.
Recommendations related to Medicaid Redesign
The State should align the budget with actual costs by reinvigorating the previously successful Medicaid Redesign Team to achieve substantial reductions in spending.
State leaders should slow the rapid growth in school aid by better targeting aid to needy districts to help offset rising Medicaid costs.
The State should cut wasteful economic development spending to help reconcile the disconnect between the budget and the true cost of the Medicaid program.
The State should not continue to obscure the true cost of Medicaid or financial plan spending obligations.
Key Data
$80 billion
— The annual cost of New York State's Medicaid program.
$1.7 billion
— The amount of the State-share payment deferred from March 2019 to fiscal year 2020.
$9 billion
— The cumulative total by which the State's financial plan understates Medicaid costs.
$3.5 billion
— The projected budget gap in fiscal year 2020 after accounting for deferred payments and re-based Medicaid costs.
$6.6 billion
— The projected budget gap in fiscal year 2023 after accounting for deferred payments and re-based Medicaid costs.
$372 million
— The amount by which State spending on Medicaid exceeded projections through June.
New York State faces a significant fiscal challenge with a Medicaid funding shortfall exceeding $3 billion in the current year and $1.5 billion annually thereafter, contributing to a total projected four-year budget gap of over $20 billion. To address these unrecognized expenses and restore fiscal balance, the State must provide an accurate financial picture and implement cost-control measures, including the reactivation of the Medicaid Redesign Team.
Recommendations related to Medicaid Redesign
The State should reinvigorate the previously successful Medicaid Redesign Team efforts to control costs.
The State should slow the rapid growth in school aid by better targeting aid to needy districts.
The State should cut wasteful economic development spending.
The State should provide a clear, accurate financial picture and take actions to reduce spending to bring the State’s finances into balance.
Key Data
$3 billion
— Medicaid State funding shortfall in the current year.
$1.5 billion
— Medicaid State funding shortfall annually thereafter.
$7 billion
— Shortfall of what the State needs to pay its budgeted obligations over the next four years.
$12.8 billion
— Cumulative budget gap already projected by the State’s most recent financial plan.
$20 billion
— Cumulative four-year projected State budget gaps.
New York's 880,000 dually eligible individuals account for 15 percent of the Medicaid population but consume 36 percent of its costs, necessitating improved care coordination strategies. To address these challenges, the state should consider options such as revitalizing integrated models, expanding partnerships between Medicare Advantage and Medicaid plans, and targeting enrollment in health homes for fee-for-service dual enrollees.
Recommendations related to Medicaid Redesign
Plans should be better marketed with more extensive consumer education to improve enrollment in integrated models.
Competition from alternative care arrangements could be constrained by not allowing integrated plan sponsors to offer MLTC plans.
The state could require MLTC plans to offer companion D-SNPs in their service area to improve care coordination.
Entities sponsoring Medicaid Advantage Plus plans could be required to not offer MLTC plans to limit competition.
The state could limit contracting with D-SNPs to plans that also have MLTC plans.
Targeted outreach and marketing to fee-for-service dual enrollees tied to passive enrollment may yield significant health care improvements.
The state could encourage enrollment among current Medicaid MCO enrollees who reach age 65 by passively enrolling them in affiliated D-SNPs.
Competition from MLTC plans could be eliminated by requiring them to convert to integrated arrangements.
The state could supplement plan marketing efforts with educational campaigns and shared materials.
The state could require common electronic medical records and shared care management plans to strengthen integration.
Key Data
880,000
— Number of dually enrolled persons in New York State in 2018.
15%
— Share of New York's Medicaid population comprised of dually enrolled individuals.
36%
— Share of New York's Medicaid program costs consumed by dually enrolled individuals.
$29,258
— Average annual combined Medicare and Medicaid costs for dual enrollees based on 2013 data.
224,857
— Number of enrollees in Managed Long-term Care (MLTC) plans as of January 2019.
174,147
— Total health home enrollment as of September 2018.
New York State should pursue a targeted package of insurance and delivery system reforms, such as a state individual mandate and bundled payments for Medicaid, to improve health outcomes and restrain costs. These reforms aim to build upon previous progress in insurance coverage and Medicaid cost control while addressing ongoing challenges like high costs and inadequate access.
Recommendations related to Medicaid Redesign
Establish a state mandate that individuals must have insurance to maintain coverage levels.
Create a new public insurance plan to provide an affordable option for individuals and groups.
Extend and expand NYS Value Based Payment (VBP) roadmap targets to further incentivize quality care.
Require selected bundled payments for Medicaid and state employee coverage to improve delivery system efficiency.
Support evidence-based interventions to coordinate care and integrate behavioral and physical health care.
Limit any future Performing Provider System (PPS) support to established, sustainable contracting and care coordination structures.
Provide full or partial state subsidy to currently ineligible individuals to expand insurance access.
Key Data
5.7%
— Percentage of New Yorkers uninsured in 2017, down from 11.9% in 2010.
8.7%
— Percentage of the US population that is uninsured.
90%
— Amount by which US per capita health care costs are higher than the median of other high-income countries.
22%
— Amount by which New York State per capita health care costs are higher than the national average.
156%
— Estimated tax increase required to fund the New York Health Act.
$139 Billion
— Amount to be shifted from individual and firm premium and direct payments to tax revenue under the New York Health Act.
New York's Health Home initiative, designed to coordinate care for Medicaid enrollees with complex needs, has struggled with lower-than-expected enrollment and difficulties in measuring performance and cost-effectiveness. To improve the program, the state should better target priority populations, strengthen ties between managed care organizations and health homes, and refine payment rates to incentivize effective outreach and care management.
Recommendations related to Medicaid Redesign
The state should implement better targeting of priority subpopulations to ensure the program reaches those with the greatest potential for health benefits and cost savings.
New York should increase its reliance on specialized Health Home entities to improve enrollment efforts by leveraging staff from agencies with which clients are already familiar.
The state should foster stronger ties between Managed Care Organizations and Health Homes to improve information sharing and mutual accountability.
Policymakers should consider alternative payment rates for Health Homes, including reduced payments for adults who have reached a duration of enrollment where greater self-management should be practical.
The state should support the centralized development of marketing and training materials to help overcome the lack of understanding of Health Home services among potential clients and reduce performance variability.
New York should launch new initiatives to encourage and speed interoperability of Health Home electronic record systems with those of Managed Care Organizations and other providers to ensure timely information sharing.
Key Data
$72 Billion
— Annual cost of New York State's Medicaid program.
175,000
— Current enrollment in New York's Health Home initiative.
$558 Million
— Annual spending on Health Homes in 2017.
$157 Million
— Amount spent on outreach in 2017.
9,247
— Number of children enrolled in specialized Health Homes as of December 2017.
$2,181 Million
— Cumulative spending on Health Homes from 2012 to 2017.
New York's Medicaid spending remains controlled under a 3.2 percent global growth cap, with ongoing efforts to reduce avoidable hospital usage through value-based payment models. To further manage these costs, the state should adopt proposed measures, such as eliminating spousal refusal, to ensure continued fiscal sustainability.
Recommendations related to Medicaid Redesign
The Legislature should accept the Governor's Medicaid proposals, including the repeal of spousal refusal, to help contain Medicaid costs.
Key Data
3.2%
— The State's share of Medicaid spending remains under this Global Growth Cap.
$72.4 billion is total Medicaid spending in the NYS Executive Budget for FY 2019. CBC's Senior Advisor for Health Policy Dr. Charles Brecher joined WT[D]P to discuss progress on Medicaid reforms and the potential impact of federal actions on health care in New York.
New York's Medicaid redesign, specifically the Delivery System Reform Incentive Payment (DSRIP) program, aims to improve health outcomes by integrating community-based organizations (CBOs) into Performing Provider Systems, yet faces significant implementation challenges. These obstacles include difficulties in defining appropriate roles for CBOs, designing sustainable business models for non-clinical services, and uncertainty regarding the long-term viability of these provider systems after the current waiver period ends.
Recommendations related to Medicaid Redesign
The State should pursue intensified State action to promote adoption of arrangements with CBOs that have demonstrated success in specific arenas and can feasibly be replicated.
Both CBOs and lead organizations should reach a mutual acceptance of more modest expectations for financial arrangements in areas where clear roles are not yet apparent.
State and federal officials should provide early and explicit attention to planning future arrangements for effective CBO engagement after the DSRIP waiver terminates.
Strategic attention should be given to identifying future funding streams for CBO participation in health care delivery to ensure long-term sustainability.
The State and CMS should more explicitly address the options for the future of PPSs to provide stakeholders with a clear basis for planning their relationships.
Key Data
$70 billion
— Annual cost of New York State's Medicaid program.
6.3 million
— Number of New York State residents covered by the Medicaid program.
$184,235,967
— Total amount budgeted for Community Based Organizations (CBOs) across all Performing Provider Systems.
$11,753,731
— Total disbursements made to Tier 1 CBOs through March 31, 2017.
$7.5 million
— Amount awarded by the State to CBO planning consortiums in May 2016.
$8.0 billion
— Initial federal funds provided for the New York DSRIP program over five years.
The first of a series of symposiums This event is the first of a series of symposiums on challenges in implementing Medicaid redesign strategies. Keynote address and presentation were given by NYS Medicaid Director Jason Helgerson.
This presentation, from the CBC panel discussion "The Berger Commission: 10 Years On," reviews how health care services in New York City have evolved since the New York State Commission on Health Care Facilities in the 21st Century, known as "The Berger Commission" issued its recommendations in 2006.
New York's Medicaid program, which accounts for 34 percent of the state budget, has successfully reduced the average cost per enrollee by 17 percent between 2010 and 2014 through redesign initiatives. Despite these gains, the state must aggressively pursue further reforms, including expanding managed care enrollment and improving coordinated service delivery models, to meet annual savings targets of up to $1.9 billion.
Recommendations related to Medicaid Redesign
New York must make more progress toward the goal of enrolling nearly all Medicaid-eligible individuals in managed care plans to address the underrepresentation of expensive groups like the elderly and disabled.
The state requires greater use of coordinated service delivery models to improve care for those with multiple conditions.
Policymakers must aggressively pursue further gains in Medicaid reform to overcome major implementation challenges.
The state must resolve complex technical issues and difficult policy choices regarding the design and implementation of the value-based payment strategy.
Key Data
34 percent
— Medicaid is the largest single item in the New York State budget, comprising 34 percent of the $156 billion State budget.
17 percent
— Average cost per enrollee between 2010 and 2014 declined 17 percent from $10,432 to $8,620.
$1.3 billion and $1.9 billion
— The annual savings target for state fiscal year 2020 is between $1.3 billion and $1.9 billion.
6.3 million
— The program provides access to medical care for 6.3 million New Yorkers.
250,000
— Since the initiative was launched in 2012, only about half of the 250,000 people intended to benefit have enrolled as Health Home members.
25
— There are 25 newly formed coalitions that coordinate care for targeted populations in specific counties.
New York's Medicaid program has implemented significant reforms through the Medicaid Redesign Team, including expanding managed care and shifting to value-based payments, which have successfully slowed expenditure growth and reduced per-enrollee costs. However, full implementation faces ongoing challenges, such as federal limitations on mandatory enrollment and the need for continued refinement of complex delivery and payment models.
Recommendations related to Medicaid Redesign
New efforts should be made to work with federal officials to develop procedures that encourage and perhaps require such enrollment in the future.
More aggressive savings goals exceeding 3 percent might be appropriate.
Continued strong monitoring of the evolution of these organizations and their action plans is essential.
If the value-based payment strategy increases the shifting of risk from plans to providers, then changes in the state regulations about the permissible extent of such risk shifting and related reserve requirements may need revision to better protect consumers.
Key Data
6.3 million
— Number of New York residents provided access to medical care through Medicaid.
$8,620
— Average annual cost per Medicaid enrollee in 2014.
$8.0 billion
— Amount of federal funds provided over five years to plan and establish Performing Provider Systems.
$30,221
— Annual cost per disabled Medicaid enrollee in New York in 2011.
The State has successfully limited Department of Health Medicaid spending growth to 3.4% through a global cap established by the Medicaid Redesign Team. The upcoming budget proposal will determine whether this cap is extended or modified for future fiscal years.
Key Data
3.4%
— The global cap on state-funded Department of Health Medicaid growth, which is in effect through the next fiscal year.
The fiscal year 2016 Executive Budget continues the Medicaid Redesign Team's efforts to control costs by extending the global spending cap and granting the Health Commissioner authority to negotiate value-based payments. Additionally, the budget allocates $850 million to resolve a federal dispute regarding Medicaid payments.
Recommendations related to Medicaid Redesign
The Legislature should support the Executive Budget's proposal to extend the Medicaid Redesign Team and the global spending cap to continue reining in costs.
The Legislature should support the expansion of the Health Commissioner's powers to negotiate value- rather than volume-based payments with health care providers.
Key Data
$850 million
— The amount set aside in the Executive Budget for the settlement of a dispute with the federal government over Medicaid payments.
New York should continue Medicaid reforms by extending the Medicaid Redesign Team's authority to cap spending and closing the 'spousal refusal' eligibility loophole to ensure funds are reserved for the neediest. Additionally, the state must address federal funding reductions for developmental disability services by restructuring Department of Health Medicaid services and prioritizing the transfer of Medicaid costs to the state.
Recommendations related to Medicaid Redesign
The Legislature should support the extension of the efforts of the Medicaid Redesign Team (MRT).
The Governor’s budget adds a year to the MRT authority to cap state-funded Medicaid spending based on national growth in healthcare prices, which should be approved and extended for more than one year.
The MRT proposal to close the Medicaid eligibility loophole of “spousal refusal” should be adopted.
Further restructuring of DOH Medicaid services will likely be needed to reduce permanently baseline spending.
High priority should be assigned to using available state resources to transfer more of the cost of Medicaid to the State.
Key Data
$1.1 billion
— Federal government's intended annual reduction in payments for services provided by the Office of People with Developmental Disabilities.
$120 million
— Proposed reduction in state spending for the Office of People with Developmental Disabilities.
$380 million
— Cuts spread among Department of Health programs to address federal funding reductions.
$600 million
— Expectation of alternative federal aid to offset reductions in funding for developmental disability services.
New York should extend the existing Medicaid growth cap for at least five years to ensure long-term cost control and realize projected savings from federal waiver applications. Additionally, the state should continue efforts to shift the financial burden of the Medicaid program away from local counties to the state level.
Recommendations related to Medicaid Redesign
The Legislature and the Governor should extend the Medicaid growth cap for at least five years to help assure realization of the waiver application’s savings projections and improve the State’s prospects of bending the Medicaid cost curve.
State leaders should shift the entire burden of financing the Medicaid program to the State in the long run, building upon the relief provided to counties last year.
Key Data
$15.9 billion
— The amount spent on Medicaid in the current state budget, making it the second largest item.
$10 billion
— The amount New York applied for a federal waiver to reinvest from expected federal savings.
$17 billion
— The estimated federal savings expected from the work of the Medicaid Redesign Team over the next five years.
2 percent
— The rate at which year-to-year Medicaid spending growth was contained in the first nine months after initial proposals were implemented.
4 percent
— The rate at which the number of Medicaid beneficiaries rose during the same nine-month period.
The state budget implements a plan to reduce the local government share of Medicaid costs, with the goal of achieving a full state assumption of these expenses by 2015. However, the budget fails to close the "spousal refusal" loophole, which allows individuals to protect assets by having one spouse refuse to contribute to the other's long-term care costs.
Recommendations related to Medicaid Redesign
The state should continue the path toward the gradual full State assumption of Medicaid costs to relieve the local tax burden.
The state should close the spousal refusal loophole in Medicaid eligibility to prevent individuals from exploiting it to protect assets that would otherwise be required to pay for care.
Key Data
3%
— The annual growth limit for local Medicaid costs established by legislation passed in 2005.
2%
— The growth rate on the local share of Medicaid costs in 2013.
1%
— The growth rate on the local share of Medicaid costs in 2014.
0%
— The growth rate on the local share of Medicaid costs in 2015 and beyond.
New York's current policy requiring counties to fund 13% of the $54 billion in total Medicaid expenditures is inequitable and inconsistent with local property tax caps, placing an undue burden on low-income areas. While the Governor's proposal to phase in a state takeover of Medicaid cost growth provides $370 million in savings for local governments by 2015, further long-term initiatives are required to fully address the state's unusual and excessive local funding requirements.
Recommendations related to Medicaid Redesign
The Governor and legislative leaders should begin planning for more far reaching, longer term initiatives that will fully solve the problem of the inequitable and unusual burden of local Medicaid costs.
The current local government share of Medicaid costs ought to be revamped to align with the new local property tax cap.
Key Data
$7.1 billion
— New York’s counties are required to pay this amount for Medicaid in the current state fiscal year 2011-12.
13%
— The portion of the $54 billion in projected total expenditures that New York's counties are required to pay for Medicaid.
$370 million
— The amount local governments will save in state fiscal year 2015-16 under the proposal.
$1 billion
— The local funding in California, the state with the next largest local share.
2.5%
— The local funding in California as a percentage of total Medicaid expenditures.
The Medicaid Redesign Team has demonstrated effectiveness in controlling costs, necessitating continued oversight and more aggressive efforts to contain spending. Furthermore, the state's inequitable local financing structure for the program should be eliminated to prevent poorer counties from bearing a disproportionate share of the financial burden.
Recommendations related to Medicaid Redesign
Continue curbing growth in Medicaid spending, as the Medicaid Redesign Team’s oversight and deliberation has proved effective and must be continued with even greater force next year.
New York’s inequitable local financing scheme for Medicaid should be phased out, as the state requires poorer counties with greater Medicaid populations to shoulder an unfairly large share of the program’s costs.
New York is halfway to achieving its $2.2 billion Medicaid savings target for fiscal year 2012, though concerns remain regarding the timely implementation of utilization controls and the impact of rising enrollment on the Global Medicaid Spending Cap. While the state has successfully implemented over $1 billion in savings, future fiscal stability depends on managing enrollment growth and overcoming obstacles in executing programmatic cost-savings measures.
Key Data
$2.2 billion
— budgeted savings target for the Medicaid Redesign Team in fiscal year 2012
$1 billion
— value of reform proposals that have been implemented by the Department of Health
$640 million
— savings considered to be “in progress” from the Global Medicaid Spending Cap
$173 million
— amount by which Medicaid spending was below the threshold in August
3.6 percent
— increase in Family Health Plus enrollment since April
New York's Medicaid Redesign Team has introduced a package of reforms aimed at reducing program spending while improving care quality, including provider rate cuts, utilization controls, and a new program-wide spending cap. While these measures represent a significant shift toward cost containment, long-term sustainability will require broader payment reforms and continued efforts to manage service utilization.
Recommendations related to Medicaid Redesign
The effective savings measures should be implemented speedily, and the new cap should be tested carefully in the coming year.
Future efforts should be pursued to reverse the new assessments that will push up the cost of care.
Future savings in line with the goal of the innovative cap strategy will require broad changes in the way providers are paid and even greater efforts to limit excessive utilization through managed care and other new controls.
A longer term look at options for malpractice reform may ultimately be more beneficial than the current short-term proposal.
Key Data
6 percent
— Average annual increase in Medicaid spending between 1995 and 2010.
30 percent
— Amount by which New York’s nursing home rates exceeded the national norm in 2007.
$12 billion
— Total cost of long-term care in 2008, representing roughly a quarter of all state Medicaid spending.
76 percent
— Increase in per recipient costs in the Certified Home Health Agencies (CHHA) program from 2003 to 2008.
40 percent
— Increase in spending on personal care services from 2003 to 2008.
0.5 percent
— Portion of total nursing home spending recovered by New York, ranking the state 32nd nationally.
New York's nursing home Medicaid spending significantly exceeds national averages, yet quality of care metrics often lag behind, necessitating a shift from an outdated, cost-based payment system to a more efficient model. The state should deepen proposed payment cuts and implement quality-based financial incentives to ensure better resident care while achieving necessary fiscal savings.
Recommendations related to Medicaid Redesign
The Medicaid Redesign Team should consider lowering payment rates even further to align with national norms.
The state should include a quality care pool to reward facilities for improving care to residents.
The Medicaid Redesign Team should strengthen the payment reform proposal to achieve greater savings and to provide financial incentives for improved care.
Key Data
$2.85 billion
— The annual Medicaid savings goal set for the Medicaid Redesign Team.
$203.21
— The average per diem Medicaid rate for nursing home care in 2007, which was 30 percent above the national average.
$6.7 billion
— The total amount New York spent on residential nursing home care in 2008.
$50,563
— The amount spent per Medicaid recipient in a nursing facility in 2008.
$100 million
— The projected annual savings from the proposed nursing home payment system.
3.6 hours
— The average amount of direct nursing care provided per day in New York nursing homes in 2008, which is below the national average.
New York's Medicaid program is among the most expensive in the nation, with 72% of costs driven by the 24% of enrollees who are elderly or disabled. To achieve the $2.9 billion savings target, the state should focus on rationalizing care for these high-cost populations while avoiding cuts to benefits for healthy mothers and children.
Recommendations related to Medicaid Redesign
Rationalizing care for high-cost populations should be the primary source of Medicaid savings.
Cuts to the eligibility and benefits of healthy mothers and their children should be avoided.
New York's Medicaid program faces high costs that can be mitigated by reducing non-competitive provider rates, rationalizing service utilization, and tightening eligibility rules. Implementing these strategies, including mandatory managed care for dual-eligible individuals and reforming personal care authorization, offers a path to significant savings without compromising necessary care.
Recommendations related to Medicaid Redesign
The state should adjust nursing home payments to bring them more in line with national norms.
The state should move more quickly to takeover Medicaid administration from counties and New York City.
The state should create more uniform and tougher rules and practices for determining long-term care eligibility, particularly with respect to “spousal refusal” and transfer of assets.
The state should promptly improve administrative practices with respect to the authorization of home care hours to reduce the number of personal care hours provided to enrollees.
The New York State Department of Health should immediately begin coordinating with the federal government to create a mandatory managed care option for “dual eligibles” that would cover acute and long term care.
Key Data
$5.8 billion
— Potential annual savings identified in previous reports on Medicaid cost containment.
$1.2 billion
— Recommended annual savings from eliminating inefficiencies and inequities in the nursing home payment system.
nearly three-quarters
— Portion of all Medicaid spending accounted for by the elderly and disabled.
66 percent
— Statewide managed care enrollment rate.
21 percent
— Amount by which New York’s nursing home rates were higher than the national average in 2008.
$2.3 billion
— Total personal care expenditures in 2008.
New York's Medicaid spending is the highest in the nation, costing $50 billion annually and burdening local governments with costs more than double the national average. To address this, the state must implement a multiyear plan that restructures the system to lower costs and improve health outcomes, specifically targeting exorbitant care costs rather than just fraud or limited services for healthy populations.
Recommendations related to Medicaid Redesign
Governor Cuomo should create a multiyear plan that addresses the problem of excessive spending on Medicaid by restructuring the system to provide better health-care outcomes and lower costs.
The state needs to bring down the cost of care where it is exorbitant to meet its obligations to the neediest New Yorkers without slashing other public services.
The state should address the number of people enrolled, the payment rates to providers, and the extent to which the services are utilized in order to contain costs.
Key Data
$50 billion
— Annual cost of Medicaid in New York.
$2,283 vs. $1,026
— New York's per-capita Medicaid spending compared to the national average.
14%
— Share of all national Medicaid spending that occurs in New York.
72%
— Share of Medicaid dollars consumed by the elderly or disabled population.
$12.5 billion
— Annual cost for long-term care for the elderly and disabled.
19%
— Growth in per-recipient spending for nursing-home care from 2003 to 2008.
New York State's Medicaid program is the most expensive in the nation, with total spending reaching approximately $50 billion and per-enrollee costs of $8,450 in 2007. While recent initiatives have targeted hospital reimbursement, prescription drug costs, and fraud, the program's significant growth—particularly in long-term care and community rehabilitation—suggests a continued need for targeted cost-containment strategies.
Key Data
$50 billion
— Total Medicaid spending in New York State, which is projected to grow to $53 billion in State Fiscal Year 2010-11.
$8,450
— The amount New York spent per Medicaid enrollee in Federal Fiscal Year 2007, the second highest nationally.
28.0 percent
— The increase in Medicaid spending for personal care services between 2003 and 2008.
$2 billion
— The increase in spending on Medicaid managed care premiums from 2004 to 2008.
$1.02 billion
— The annual reported cost savings (State share) achieved by the Office of the Medicaid Inspector General in State Fiscal Year 2009-10, up from $300 million in 2006-07.
$468 million
— The total cost savings reported by the Office of the Medicaid Inspector General for the first quarter of calendar year 2010.
New York's Medicaid program faces significant fiscal challenges, with the elderly and disabled populations consuming 72 percent of expenditures despite representing only 24 percent of enrollees. To achieve meaningful cost control, the state must prioritize restructuring long-term care services and addressing provider payment rates and utilization rather than focusing on minor program expenses.
Recommendations related to Medicaid Redesign
Three factors drive Medicaid costs—enrollment, provider payment rates, and utilization; these factors should be addressed in any cost containment proposals.
A multi-year plan that takes this politically powerful bull directly by the horns—restructuring the system to provide better health, better outcomes and lower costs—should be developed.
Rates and utilization—specifically in long-term care and other services for the elderly and disabled—should be the primary focus for future cost control initiatives.
Proposals should avoid focusing only on the fringes of program expenses, such as fraud and the already limited costs of healthy mothers and children, as these will not yield significant fiscal relief.
Because the Affordable Care Act prohibits changes to Medicaid eligibility until 2014, the state must focus on rates and utilization as levers to bring Medicaid costs down.
Key Data
$50 billion
— Annual cost of the New York Medicaid program.
72 percent
— Share of Medicaid dollars consumed by the elderly and disabled, who comprise only 24 percent of enrollees.
$47,909
— Average cost per recipient for long-term care in an institutional setting.
$63,467
— Per recipient cost of community rehabilitation services in calendar year 2008.
$23.8 billion
— Annual care cost for the disabled population in New York.
$11.9 billion
— Annual care cost for the elderly population in New York.
New York's Medicaid spending per beneficiary is 69 percent higher than the national average, necessitating reforms to long-term care eligibility and increased managed care utilization. Closing loopholes for middle-class and wealthy individuals and tightening asset transfer rules could save the state $1 billion annually.
Recommendations related to Medicaid Redesign
Eligibility loopholes for long-term care that allow middle-class and wealthy New Yorkers to benefit from the program should be closed.
Tightening eligibility to individuals with homes worth less than $500,000 and applying the look-back period for asset transfers to eligibility for home care would save $400 million annually.
Controlling excessive utilization of personal care services and expanding managed care would save $600 million annually.
The State should link payment for hospital inpatient care, nursing homes and home care to patient needs rather than historical institutional costs.
Key Data
69 percent
— Medicaid spending per beneficiary in New York is higher than the national average.
$500,000
— Threshold for individuals with homes to be eligible for Medicaid.
$400 million
— Annual savings from tightening eligibility and applying the look-back period for asset transfers.
$600 million
— Annual savings from controlling excessive utilization of personal care services and expanding managed care.
$1 billion
— Total annual savings from closing eligibility loopholes and controlling personal care utilization.
New York's Medicaid program is significantly more expensive than the national average, with costs per enrollee nearly double the national norm, largely due to inefficient eligibility rules, high provider payment rates, and excessive utilization of services. By tightening eligibility, aligning payment rates with competitive standards, and increasing managed care participation, the state could save approximately $4.6 billion annually without compromising access to care for those in need.
Recommendations related to Medicaid Redesign
The State’s medically-needy eligibility rules should be tightened.
Spousal refusal should be permitted only under limited circumstances.
The three-year look-back provision relating to asset transfers should be applied to home care, be enforced more vigorously, and the financial penalties should be greater.
More should be done to encourage the purchase of private long-term care insurance among those with sufficient means.
Limiting Medicaid provider payments to rates based on competitive costs would save about $2.5 billion annually.
Efforts should be made to build the capacity among managed care organizations to manage care for these groups effectively.
A suitable goal would be to enroll about one-third of the elderly and disabled eligibles, or about 350,000 individuals, in a managed care plan.
Bringing use of personal care services more in line with national norms would save about $1.0 billion annually.
The policy objective to which hospital leaders should adjust is a smaller role for New York hospitals in graduate medical education, rather than continued extra financial support in order to play the bigger educational role.
Key Data
$4.6 billion
— Annual savings from Medicaid cost containment measures.
$7,646
— New York's annual cost per person enrolled in the Medicaid program.
$3,936
— National average annual cost per person enrolled in the Medicaid program.
$608 million
— Annual savings from tightening eligibility rules for the elderly and disabled.
$2.5 billion
— Annual savings from limiting Medicaid provider payments to rates based on competitive costs.
$1.0 billion
— Annual savings from bringing personal care services in line with national norms.
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