Monthly Column: Medicaid cost structure grossly unfair to counties


By: Michael H. Ranzenhofer, State Senator - 61st District

According to an Empire Center for New York State Policy report, 1.2 million New Yorkers moved to other states between 2000 and 2009, and taxpayers exiting New York had incomes 22 percent higher than those moving in.  These facts are startling, but do not come as a surprise to many of us, who have had neighbors, friends and family leave New York for other states. 

As more and more residents have left over the last decade, the burden of New York’s Cadillac Medicaid program becomes heavier and heavier for the remaining New York State residents, especially for homeowners whose property tax dollars almost all go towards the county’s share of Medicaid costs.

In my August column, “Wanted: more mandate relief from Albany,” I noted that Medicaid, one of the most costly and overly burdensome unfunded mandates to county governments, must be reformed as part of a plan to provide mandate relief.  In my opinion, the first step to reforming Medicaid is changing the structure of how it’s paid for.

As it is now, the federal government covers 50 percent of the costs for Medicaid, while the state and county governments each pay 25 percent – a system that is grossly unfair to county governments.  For years, the state of New York has mandated counties pay for Medicaid - without any local input on which services to offer and how to provide them- then forced county governments to foot part of the bill. 

That is why I have offered my strong support for legislation, introduced by Senator Patrick Gallivan and Assemblywoman Amy Paulin, to gradually transfer the county’s entire share of Medicaid costs to the State. 

The legislation, Senate Bill 5889-B, first eliminates the annual three percent spending increase to Medicaid, leading to a reduction of $180 million for county governments.  The proposal further reduces the county’s share by 5 percent, beginning October 1, 2012, for an additional savings of $225 million. Lastly, the bill transfers the remaining of the county’s costs to the state, over the next seven years, so that the county’s share of Medicaid would be reduced to zero by 2019. 

After being introduced a month ago, this legislation has bi-partisan support in the State Senate and State Assembly, and the New York State Association of Counties and New York State Association of County Executives have voiced their official support as well.

Transferring the local share of Medicaid costs will deliver significant cost savings to counties, and make the state think twice about all of the optional, non-mandated services it provides through its Cadillac Medicaid program.  Most importantly, it will put county governments in a better position to greatly reduce property taxes for residents, as Erie County is forced to spend almost all of its property tax dollars on Medicaid.


Senator Ranzenhofer's monthly column appeared in the Amherst, Clarence and Ken-Ton Bee on Wednesday, October 19, 2011.