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February 25, 2004

Study: State could safely cut $4.6 billion of Medicaid costs

New York State could cut Medicaid expenses by $4.6 billion without reducing the program's effectiveness, according to a new report from the Citizens Budget Commission (CBC).

“Medicaid costs are overwhelming counties across New York State,” said Diana Fortuna, president of CBC. “The problem is not that New York provides too many benefits to the needy but that it is providing them inefficiently, and does not adequately target scarce public dollars to the needy.”

The report echoed Business Council research that found that New York's Medicaid expenses per enrollee are nearly double the national average at $7,646.

In November 2002, The Business Council's research affiliate, The Public Policy Institute of New York State, noted that New York's Medicaid spending in 2003 would be $36 billion — more than 40 other states would spend in their entire budgets that year.

The CBC report, “Confronting the Tradeoffs in Medicaid Cost Containment,” highlighted several ways New York lawmakers can reduce Medicaid spending, including:

“These recommendations would reduce costs significantly while protecting needy New Yorkers from loss of access to medical care,” the report said.

The report also said the state should seek a waiver from the federal government to allow New York to keep much of the revenue obtained by the cost-cutting measures.

“As with many federal waiver programs, a major-cost-cutting initiative in new York should allow New Yorkers to share the benefits obtained by the federal government.”

For the full report, visit www.cbcny.org.