Medicaid Reforms Generate Greater Local Savings

Thomas P. Morahan

July 12, 2006

New York State Senator Thomas P. Morahanannounced that Medicaid reforms he supported to ease the burden on local governments and property taxpayers, have resulted in significantly greater savings than originally projected. Senator Morahan called on Rockland and Orange counties to pass along the unexpected savings to property taxpayers.

"The Medicaid reforms the Senate pushed for two years ago are generating significantly greater savings for counties than we anticipated and those savings should be passed along to property taxpayers," Senator Morahan said. "The Senate pushed for a State takeover and cap on local Medicaid expenses, as well as cost containments and reforms that have resulted in more Medicaid savings for counties and that should translate into more savings for property taxpayers."

As a result of Medicaid cost containment measures and the State cap and takeover of local Medicaid expenses, Rockland County will save almost $ 6.2 million more than originally projected in 2006 and 2007, for a total savings of $ 23.7 million over those two years; Orange County will save almost $ 5.6 million more than projected, for a total two-year savings of $ 24.3 million.

Throughout the State, savings from Medicaid reforms are expected to be a total of $188.6 million more than projected for 2006 and 2007 (Upstate/Long Island) for a total savings to local governments of $758 million over the two years. New York City is projected to save an additional $344.3 million over two years for a total savings of more than $1.6 billion.

The 2005-06 State budget included measures aimed at stemming the growth of Medicaid, including a sweeping cap on the program’s cost to local taxpayers, as well as strong accountability standards aimed at checking excessive local spending growth.

The budget also implemented a preferred drug list to save on Medicaid spending related to prescription drugs. The Medicaid reforms also placed a strong emphasis on managed care that helped save money while ensuring that New Yorkers have access to quality health care.

This year, the Legislature enacted the Senate-initiated plan to combat Medicaid fraud and create a Medicaid Inspector General. The anti-fraud plan, which is the most comprehensive in the nation, fights fraud and abuse at every step of the process, from billing and pre-payment review to investigation, civil recovery and criminal prosecution of Medicaid thieves. The plan could save taxpayers billions of dollars that are lost through fraud.

In 2004, the State began a takeover of the local share of the Family Health Plus program to provide additional savings to local governments and property taxpayers.

"Property taxpayers were shouldering an unfair burden of runaway Medicaid spending and now we are seeing that the reforms we enacted have helped bring the cost of the program under control," Senator Morahan said. "The updated data makes it clear that local governments are saving even more than projected and presenting a tremendous opportunity to provide relief for property taxpayers."