Senate Bill S4502

                                 
BILL NUMBER: S4502

SPONSOR: RIVERA
 
TITLE OF BILL:

An act to repeal sections 91 and 92 of part H of chapter 59 of the laws
of 2011 relating to the year to year rate of growth of Department of
Health state funds and Medicaid funding, relating to the state Medicaid
spending cap and related processes

 
PURPOSE:

To enable the Medicaid program to meet the actual needs of Medicaid-eli-
gible New Yorkers, reflecting the cost of care, health care needs, and
growth of the eligible population, instead of being limited by an arti-
ficial cap and cuts by administrative fiat.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 repeals section 91, as it relates to the Medicaid spending
cap, and section 92, as it relates to executive powers of part H of
chapter 59 of the laws of 2011.
              

Section 2 provides an effective date.

 
JUSTIFICATION:

The 2011 state budget imposed a percentage cap on Medicaid spending
growth, called for by the Governor as proposed by the Governor's Medi-
caid Redesign Team. That cap is calculated annually based on the overall
healthcare inflation rate for the past decade. For particular budgets,
marginal changes have been made, such as moving some expenditures out
from under the cap and putting other expenditures back under it, and
most recently allowing Executive actions under the COVID-19 emergency.
But the basic policy remains in place. It does not account for increased
Medicaid enrollment caused by a bad economy; more older adults living
longer and needing more home care or nursing home care; and increased
costs above the 10-year average inflation.

In May 2020 the Urban Institute estimated potential Medicaid enrollment
growth between 600,000 and 900,000 if New York reached 15%-20% unemploy-
ment. This would represent a 10%-15% enrollment increase. With New York
above 15% unemployment in June 2020, it is clear that enrollment growth
alone will far surpass the spending necessary to keep up with costs, let
alone accounting for increased provider costs related to COVID-19.

Whenever Medicaid spending is expected to breach the cap, the 2011 law
gives the Health Commissioner and Director of the Budget unilateral
powers to impose cuts in covered benefits, eligibility, or payments to
providers (hospitals, doctors, and other healthcare professionals,
community health centers, home care agencies, drug treatment programs,
etc.) The cap mechanism is intended to impose austerity without any
mechanism for revenue measures and excludes the legislature despite its
co-equal role in the budget process.

This legislation would repeal the Medicaid Global Cap and the adminis-
trative powers that were adopted with it to ensure that our State Medi-
caid program can respond to the needs of the growing numbers of people
who have and are expected to continue to enroll in this safety net
program. It will ensure the state is not forced to cut provider rates,
reduce covered benefits, and/or restrict those who are eligible even
further to remain under an artificial, self-imposed spending cap that
lacks the necessary flexibility to ensure New York cares for its most
needy.

 
PRIOR LEGISLATIVE HISTORY:

2021-2022: S5255 Rivera / A226 Gottfried

2023-2024: S4861 Rivera / A7786 Simon

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
Immediately.