(The Center Square) Four years ago, New York state spent more money per resident on Medicaid, the joint-federal-state program for the poor and disabled, than any other.
Today, the state spends an additional $700 per resident on Medicaid, a rate of growth that far exceeds that of any other program in its budget, an investigation by The Center Square found.
The Empire State spends $4,924 per capita on Medicaid, according to state figures. By contrast, the next closest state, Kentucky, spent $3,700 in 2022. As recently as 2021, Gov. Andrew Cuomo’s last year in office, New York’s figure was $4,240.
The spike has occurred despite a decline in Medicaid enrollment. In October 2023, a peak of 7.7 million of New York’s 19.6 million residents were enrolled in the program. Now 6.8 million are.
Typically, shrinking enrollment would result in shrinking state spending. But that hasn’t happened. The state’s operating funds for Medicaid have jumped to $44.7 billion from $27.7 billion—a 61.3 percent increase — between 2022 and April of this year when the 2026 budget started.
What has driven the increase is New York’s ten-year-old at-home care program for Medicaid recipients, a plan that pays relatives to take care of their loved ones. Known as the consumer directed personal assistance program, its budget is $11.2 billion. The initiative has become so popular that state officials are looking for ways to trim costs.
Bill Hammond, senior fellow at health policy for the Empire Center for Public Policy, notes that Medicaid takes up more than thirty-five percent of the state budget, a figure he expects will continue to grow under Cuomo’s success, Gov. Kathy Hochul, also a Democrat, and the Democratic-controlled legislature.
“She’s spending a lot more on Medicaid in particular,” Hammond said in an interview. “They say we have an aging population, but it’s not increasing 12 percent a year. She has a different attitude about spending than Cuomo did. Spending has skyrocketed.”
A Hochul spokesperson was not immediately available for comment.
Created in 1965 as a centerpiece of President Lyndon Johnson’s War on Poverty, Medicaid provides insurance to 71 million poor and frail Americans. Unlike Medicare, the health insurance program for elderly Americans, state and local governments pick up part of the tab for Medicaid, at least 40 percent in the case of states. The federal government spent $919 billion on the program in 2023-’24, the latest year for which figures are available.
Medicaid is not the only budget item that caused New York State’s state operating funds budget to swell to $143.8 billion this year from $123 billion in 2022, according to state figures.
In addition to increased spending on Medicaid, the Empire State has boosted annual funding for K-12 public schools, to $37.6 billion this year from $29.2 billion in 2022. As The Center Square has reported, the state spent more per pupil, $35,095 in the 2023-’24 school year, than any other.
Overall, New York’s K-12 school budget has jumped 22.3 percent since 2022. By contrast, the state spent 6 percent more on all other budget items, including police, highways and roads, housing and prisons.
Like their counterparts in Washington, New York lawmakers have struggled to find ways to reduce Medicaid’s costs.
One problem is the program’s popularity. According to a June poll from the Kaiser Family Foundation, a nonprofit, 93 percent of Democrats, 81 percent of independents, and 72 percent of Republicans expressed approval of the safety net plan.
Despite strong public support, studies show that Medicare’s effect on enrollees has been a mixed bag.
According to a 2013 article in The New England Journal of Medicine, a study by ten health scholars compared 6,800 Oregon residents who enrolled in Medicaid with 5,800 who did not. It found that Medicaid significantly increased the percentage of people who were diagnosed and treated for diabetes, decreased the share of those who tested positive for depression and reduced severe financial strain.
However, the study also found that Medicaid recipients were not more likely to be diagnosed for hypertension, high cholesterol levels or use the medications for those conditions. In addition, the authors did not find significant differences in physical health outcomes in the first two years of enrolling in Medicaid.
Fiscal observers note that New York’s budget would be worse off if Wall Street’s recent boom had not helped bail out the state indirectly. The S&P 500, a basic barometer of the stock market, has increased 47.6 percent since 2022.
ELISE STEFANIK EYES LIFE BEYOND HOUSE, IS UNAFRAID TO GO OUT FIGHTING
Hammond of The Empire Center added that Gov. Hochul is up for re-election next year, an event likely to precipitate more state spending on Medicaid.
“New York had all this federal money,” he said, referring to the federal government’s spending infusion as the result of the coronavirus pandemic from 2020 to 2023, “and it spent and continued to spend on Medicaid and education and while it subsided, with an election coming up, it’s about to be jacked up again.”