For Release — Tuesday, December 21, 1999
Look at the History of Health-Care
Entitlements in New York State
ALBANY—In 1966, Governor Nelson A. Rockefeller proposed, and the Legislature adopted, a health care program the Governor said would be “the most comprehensive program of its kind in the nation.” But the cost quickly escalated beyond even the wildest fears of its few opponents. And the revenue that was supposed to help pay for it (in this case, federal aid) never met the expectations of those who drafted the plan.
That program is still with us today. It’s called Medicaid. It costs the taxpayers $24.525 billion a year on a per-capita basis, well more than twice the national average. It costs the state government, alone, $8.6 billion a year (compared to the first estimate of $88 million a year). Here are some mileposts from its early days:
- March 9, 1966: Governor Rockefeller proposes a huge
expansion of the state’s existing health-care program for the
needy, which he says is needed to capture $90 million in federal aid
the state would otherwise lose. He specifies no estimate at all for
a net new cost to the state or the localities (which would share the
- Press coverage of the debate in the Legislature focuses not on the
cost, but on a turf dispute over whether the program would be administered
by the Health Department or the Department of Social Welfare.
- April 29, 1966: The program passes the Legislature,
under an emergency “message of necessity” from the Governor.
- Soon thereafter, a public debate erupts over the cost. Governor Rockefeller
says “the state and local contributions will be the same or less
than they were last year.” But there is an initial state appropriation
of $66 million for nine months, and before the first year is out the
state cost has climbed to $102 million. The Governor insists that even
in the worst case the program will add no more than 3 percent to the
cost of local government.
- The next year the state cost hits $206 million.
- January 1968: The state cost is $315 million. Governor Rockefeller begins campaigning for reductions in the program. He laments that the expansion of coverage increased demand and thus inflated prices in the health-care sector. He says some counties have had to raise property taxes by as much as 50 percent - and that the promised revenue stream (aid from Washington) is producing much less than expected.
In current-dollar terms (that is, adjusted for inflation), today’s
Medicaid program costs the state
approximately 11.3 times what was projected in 1966.
Click here to get a PDF copy of this release with attached excerpts from from Governor Rockefeller’s public papers.