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Confronting Medicaid

  Any serious attempt to clean up New York’s fiscal mess must tackle the Medicaid issue head-on. The insurance program that provides medical care and long-term care services to low-income and disabled people in New York costs more than $50 billion a year-roughly 40 percent of the total state budget.

  No other state spends nearly as much as New York on Medicaid-not even California, which has twice as many enrollees. On a per capita basis, New York’s spending doubles the national average.

  In his 2011-12 executive budget, Gov. Andrew Cuomo calls for a Medicaid spending reduction of $982 million or 2 percent. He also aims for a total reduction of $2.85 billion in Medicaid spending compared to the current plan, and $4.6 billion in 2012-13.

  How? His plan left those details to a Medicaid Redesign Team, which is supposed to present its recommendations to the governor on March 1.

  Understandably, many people are very concerned about where the cuts will fall. Hospitals and nursing homes fear reduced payments, which they say already are too little to cover Medicaid costs. Advocates for the poor and disabled think the cuts will hurt those who are most vulnerable.

  Anyone who says reining in the program’s spending won’t be difficult is not being honest. It took decades to build the Medicaid edifice, and reducing its size will require significant, even wrenching, change. But it must be done.

  One area to target is the large array of optional benefits available to New York enrollees. These benefits range from physical therapy and private-duty nursing to eyeglasses and dental care. No other state is so generous, and New York needs to bring these offerings in line with national benchmarks.

  Another provision of New York’s Medicaid program that has boosted costs is the so-called "spousal refusal" option, which allows coverage of long-term care for a spouse or child whose legally responsible adult refuses to support the applicant. Overall, long-term care accounts for roughly half of Medicaid spending, and it is the fastest-growing portion of the program.

If the governor’s Medicaid team lays out recommendations that take aim at such areas, it will be a very good sign, indeed.

2/25/11 (c) 2011 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail rbj@rbj.net.


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