The Medicaid Showdown: A User's Guide

By Kai Wright.

Published April 15, 2004

If there’s one thing everyone agrees on about Medicaid, it’s this: The government health program for poor people is in critical condition.

It is New York’s second-largest budget item, topped only by public education. It eats more than $13 billion in state funds, and $42 billion when all funding streams are counted. That amount has been growing-by an average of 9 percent a year throughout the 1990s. At the same time, Albany lawmakers are reckoning with a budget deficit approaching $5 billion and a court order for the state to pump billions more into public education.

Last year, the governor threatened $1.6 billion in cuts, then won a brief reprieve by helping secure a temporary funding boost from Washington for state Medicaid programs nationwide. But that hike is set to expire this summer, and this year the U.S. House of Representatives is considering more than $2 billion in cuts. Meanwhile, county governments throughout New York State are threatening all manner of political revolt if they are not relieved of their burden to pay into the system-an estimated $6.6 billion this year. So Governor Pataki and the State Senate have vowed that 2004 will be the year they slay the Medicaid budget dragon.

The governor’s office and those who agree with its assertion that Medicaid has become an “unaffordable burden” have derisively labeled our system the “Cadillac” of public insurance. They note that we spend three times the amount, per capita, that California does.

The health care industry and advocates for Medicaid’s users look at the same numbers and see a different story. The industry points out that compared with other states, New York is home to a dramatically larger population of people who are the most expensive to care for-seniors and people with disabilities or chronic illnesses. Consumer advocates add that New York’s Medicaid bill is high because this state, far more than others, leans on the program and its federal funding stream to cover a staggering menu of health-related expenses. In California, for instance, mental-health care is something counties must pay for out of their own funds; but in New York, we fold it into the shared cost of Medicaid. New York’s bean-counters have also become so adept at transferring loosely related costs to the Medicaid system that the practice has turned into a verb-as in, we’d like to “Medicaid” the cost of graduate medical education (a proposal on the table this year).

But whatever the reason for the program’s expense, there’s no avoiding the political reality: In tough budgetary times, Medicaid’s price tag makes it a prominent target. The question is no longer whether to tamp down New York’s Medicaid costs, but how.

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Check out City Limits’ four-page guide to the Medicaid Showdown!