Spending Watch


Bulletin #11: June 7, 1999
Medicaid costs far too much - we can't go backward now

New York's hugely expensive Medicaid program may become even more costly in the next few weeks. Cost-saving measures that Governor Pataki and the Legislature enacted in recent years are scheduled to expire after June 30.

If these reforms are not extended, the result would be a new, $177 million bill in the coming year for New York City, according to the Division of the Budget. Counties elsewhere in the state would face new costs totaling $111 million - including $10.5 million in Erie County, $14 million in Nassau, $6.8 million in Monroe County and $8 million each in Westchester and Suffolk counties. Taxpayers would take another $628 million hit at the state government level.

Even after some progress, we're still way out of line

New York taxpayers support 15 percent of Medicaid spending nationwide, even though we make up less than 7 percent of the nation's population and about 9 percent of all Medicaid recipients. Amazingly, that represents progress from just a few years ago, when New York generated 18 percent of all Medicaid spending. By enacting sensible reforms, Governor Pataki and the Legislature have saved taxpayers billions of dollars.

The progress we've made isn't nearly enough. The Medicaid mandate is a major reason our local taxes are more than double the national average. And those local taxes, in turn, are a key reason we still lag the nation's job growth. Containing Medicaid costs is a key element in relieving state mandates so localities can cut taxes and improve services.

What cutbacks? Hospital employment is up

Hospital lobbyists say their clients need the new money desperately. C'mon - we hear that claim every year. The Greater New York Hospital Association has repeatedly used apocalyptic words such as "nightmare," "disaster" and even "people will die" to demand more taxpayer money. And yet hospital employment is up by 2,800 in the past year, we're paying to train doctors New York doesn't need, and we still have more hospital beds than we can use.

We hope the Governor and the Legislature can agree on a new budget soon. If not, renewing the Medicaid reforms must be part of any "emergency" budget bills. For taxpayers, this truly is an emergency.