A Step Backward on Medicaid Funding
New York’s policy of requiring counties and New York City to pay a sizable share of Medicaid costs is out of step with other states and results in an inequitable distribution of Medicaid costs among New York taxpayers. In 2005 the State capped the growth in the local share of Medicaid, which was a step in the right direction. In 2012 the State began a phased takeover of local share growth—a further improvement. However, the 2017 Executive Budget proposes to reinstitute New York City’s contribution toward growth in Medicaid expenses, which would be a giant step backwards.
As the map below indicates, the burden of the local share of Medicaid costs falls hardest on the poorest counties. Rescinding the State’s assumption of growth for New York City will further exacerbate this inequity. New York City currently has the highest Medicaid burden per capita at $597 (see table above), compared to the average local share throughout the rest of the State of only $190 per capita. Similarly, New York City has the highest ratio of local Medicaid costs per $1,000 of income—$10.00 versus $3.63 on average for the rest of the State. On the other end of the spectrum, Putnam County’s local Medicaid costs, per capita and as a share of income, are the lowest of any county in the state - $96 per capita and $1.70 per $1,000 of income.
By requiring counties and New York City to pay a local share of Medicaid, taxpayers with equivalent incomes living in different counties end up paying very different amounts toward Medicaid through local taxes.1 New York State was on the right path by taking over the growth in local Medicaid spending; rescinding that policy–even if for only one locality—would be a mistake.
- The local share of Medicaid in New York was 25 percent of costs in that locality when the program was established in 1966. There have been a series of incremental changes since 1966, but a substantial local share remains. See: Citizens Budget Commission, A Poor Way to Pay for Medicaid: Why New York Should Eliminate Local Funding for Medicaid (December 2011).