What's New

Zack Hutchins
Director of Communications

March 17, 2005

Report: New York's high Medicaid costs are driven by spending on "all of the above"

New York State's Medicaid spending is more than twice the national average because of high spending on almost every part of the program, according to the newest report in the Public Policy Institute's Medicaid Watch '05 series.

"Medicaid pays for many different programs. In almost every area, New York spends more -- much more -- than other states," the report says.

Hospitals, nursing homes, and personal and home care are all major cost drivers in the program, according to the Institute.

"With a total cost of $10.2 billion in 2003, or $531 for every state resident, our hospitals/clinics expenditures are almost three times the national average, on a per-capita basis. Reducing our spending in this area to the U.S. average would save taxpayers $6.6 billion," according to the report, which is called Where Do All Those Billions of Taxpayer Dollars Go? Answer: All of the Above.

The state also spends more than twice the national average on nursing homes, and on home health care and personal care, the report said. "We spent $7.1 billion on nursing homes, and $6.6 billion on home health care and personal care, in 2003," the report said. "In each case, reducing our spending to the average would save taxpayers more than $4 billion."

New York's Medicaid program also enrolls a higher percentage of its population (nearly 20 percent) than the nation (14 percent), the report added.

New York uses Medicaid dollars to pay for services, such as care for the mentally disabled, that other states fund through different means, the report noted. But that doesn't explain the state's high spending on hospitals, nursing homes, and home and personal care, the report added.

The report also showed that Albany will spend more than half a billion dollars just to administer Medicaid in the coming year.

The Public Policy Institute is publishing Medicaid Watch '05 to document the case for reforms that reduce overall costs imposed on New York’s taxpayers, businesses, farmers, and county governments. The first report, published March 13, is Virtually Everyone Agrees Medicaid Costs Too Much. Will Albany Finally Act? All reports in the series are at www.ppinys.org.

To interview Robert Ward about Medicaid spending or the reports, telephone 518/465-7511, ext. 271.