AP NEWS

Governor says Medicaid gap is a ‘major problem’

November 5, 2019

ALBANY, N.Y. (AP) — Democratic Gov. Andrew Cuomo on Tuesday called ballooning Medicaid spending a “major problem” in New York.

Cuomo told reporters that his administration is considering spending cuts or further budgetary maneuvers to address a $3 billion or $4 billion shortfall for the state fiscal year ending March 31.

Meanwhile, the state comptroller urged the governor to provide more specifics on the shortfall and his administration’s response as soon as possible. The comptroller’s Tuesday report projects state tax revenues will grow by 7.6% through spring 2020 but will rise at a slower pace — 5.2% — the following year.

The Cuomo administration is blaming the shortfall on costly long-term care, increasing enrollment and payments to financially distressed hospitals. Officials have stopped short of sharing details that shed light on how the shortfall appears to have suddenly ballooned this spring.

Cuomo’s administration already delayed $1.7 billion in Medicaid payments by three days, into this fiscal year, to abide by a spending cap and avoid payment cuts.

The director of Cuomo’s budget office has said delayed payments are less harmful for the public than payment cuts. Earlier this year, the governor proposed and withdrew $500 million in across-the-board Medicaid cuts.

And his administration has faced lawsuits this year from nursing homes and personal care aide programs who say the state is now slashing Medicaid funding. Nursing homes are still set to receive the first cost-of-living increase in years, which the state quietly allowed last fall.

Cuomo’s administration has said it changed the timing of Medicaid payments — ranging from $50 to $435 million — in past years to comply with the state’s cap on such spending.

Fiscal groups such as the Citizens Budget Commission have said the state has often changed what falls under the spending cap, and has failed to moved swiftly and transparently enough to address the shortfall. Such observers note state budget officials have again missed a deadline to release a financial plan that could propose solutions.

“Continued failure to address the underlying cost growth or identify other state savings represents a major challenge and risk to state finances,” a spokesperson for the Citizens Budget Commission said in a statement.