Hochul administration faces legislative resistance over medicaid spending in New York

Governor Kathy Hochul has encountered resistance from state lawmakers, as health care commands the lion’s share of the proposed $233 billion state budget. The implications of potential funding cuts loom large over the already delicate relationship between the governor and the Legislature.

Over the past year alone, New York’s Medicaid has witnessed an 11% surge, reaching a staggering $35 billion within the state’s comprehensive spending plan. Governor Hochul, addressing the issue during her budget presentation last Tuesday, expressed a pressing need to identify ways to save over a billion dollars in Medicaid, citing a 40% increase in spending over the past three years. The spike in enrollment during the COVID-19 pandemic defied expectations, with future projections pointing towards heightened reliance on nursing homes and home care—sectors now under scrutiny for reductions.

James McDonald, the Commissioner of the state’s Department of Health, urged legislative leaders in Albany on Tuesday to collaborate in identifying over $1 billion in potential savings from program spending. State Senator Gustavo Rivera, Chair of the Committee on Health, countered, emphasizing that the focus should be on stabilizing the system rather than implementing cuts. Rivera proposed restructuring long-term managed care and seeking federal funding for coverage of undocumented individuals as alternatives.

Home health aides emerged as preferred alternatives post-pandemic, leading to a plea from industry workers against further cuts. Connor Shaw, Political Director for Home Healthcare Workers of America, argued before the legislature that not only is home health care a more cost-effective option for the state, but there is also a severe shortage of home health aides statewide.

Fiscal watchdogs, including Bill Hammond, Senior Fellow for Health Policy at the Empire Center for Public Policy, cast doubt on the feasibility of the governor’s proposals, pointing to increasing pressure within the legislature to expand Medicaid spending.

As the Legislature has several more weeks to navigate budget discussions with the governor, a resolution to the Medicaid spending dispute remains elusive amidst concerns and opposing viewpoints.