State Budget Caps Medicaid, Requires State Takeover Of Family Health Plus

John J. Flanagan

April 15, 2005

Republican legislators from Suffolk County government gathered on the steps of the state office building in Hauppauge today to inform county residents of the expected savings that county and local governments should receive from the state’s restructuring of Medicaid and the Family Health Plus program.

“The state Legislature has delivered property tax containment measures to county governments by capping Medicaid and taking over Family Health Plus,” said Assemblywoman Patricia L. Acampora (R,I,C,WF-Mattituck). “These cost-containment measures will relieve Suffolk County taxpayers of skyrocketing property taxes and control the growth of the county’s Medicaid responsibility. Now it’s time for the county executive and legislature to pass on this year’s $5 million dollar-plus savings to the taxpayers of Suffolk County.”

Assemblyman Thomas F. Barraga (R,C,I,WF-West Islip), the ranking Republican of the Assembly Ways and Means Committee, stated, “As a result of the Medicaid cap approved as part of this year’s state budget, Suffolk County will save approximately $339 million over a five-year period.” Barraga added, “Suffolk County taxpayers deserve to have every dollar returned to them in county property tax relief. County Executive Steve Levy should return all of the savings to county taxpayers.”

The state budget approved by both houses calls for restructuring Medicaid and requiring the state to assume the costs of Family Health Plus. The Republican legislators said this will provide county governments throughout the state with relief from double-digit percentage increases in their mandated payments in recent years. They pointed out, though, the budget doesn’t contain provisions directing county governments to pass the savings down to taxpayers.

Sen. John J. Flanagan (R,C-East Northport) said, “The 2005-06 state budget will begin five years of Medicaid relief for Suffolk County, which is expected to total nearly $153 million over that period. This legislation rightly provides reforms and cost containment that will make Medicaid more efficient and improve the quality of care. The Suffolk County executive received the relief he was looking for – now real property tax relief for the people of Suffolk County must follow.”

The budget establishes a cap on local governments’ share of Medicaid expenditures.

The cap for Suffolk County, based on its 2005 expenditure, will provide a savings of nearly $5.9 million to taxpayers this year and a five-year savings of more than $338 million. A growth adjustment will then be applied to the 2005 capped amount each ensuing year: 3.5 percent in 2006; 3.25 percent in 2007; and 3 percent in 2008.

“I applaud the state delegation for recognizing the urgency of Medicaid reform and for delivering much-needed fiscal relief for Suffolk County,” said Presiding Officer Joseph Caracappa. “With this relief in place, we now look to the county executive to abandon his fiscal Doomsday predictions and to present an operating budget that responsibly provides for the same high level of programs and services that Suffolk County taxpayers have come to expect.”

Effective Jan. 1, 2008, each county will be required to make an annual payment to the state for Medicaid costs based on either its capped amount as of 2007, plus a 3 percent growth increase each year or an equivalent amount of its local sales tax revenue plus any growth.

“The state takeover of Medicaid and Family Health Plus ensures that the county’s Medicaid expenditures will not soar out of control. In fact, it will provide Suffolk County significant savings,” said Senator Kenneth P. LaValle (R,C). “I strongly believe the county should pass the savings on to local taxpayers. I urge the county executive to make every effort to use this opportunity to deliver real property tax relief for residents.”

Family Health Plus is a public health insurance program for adults between the ages of 19 and 64 who don’t have health insurance on their own or through their employers, but have incomes too high to qualify for Medicaid.

The state takeover, to begin this October for counties outside New York City, will provide Suffolk County with $1,533,535 in savings for 2005 and a five-year savings of more than $92.3 million.

The total five-year tax savings for Suffolk County under the Medicaid cap and Family Health Plus program takeover amounts to $431,142,693.