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Cuomo plans to overhaul Medicaid, cut local funds to face $6.1B deficit

By Nolan Hicks, Bernadette Hogan and Bruce Golding, via NYPost


Gov. Cuomo unveiled plans Tuesday to reduce the state’s looming $6.1 billion deficit by forcing New York City and other local governments to rein in their Medicaid spending — or pay for it on their own.

Cuomo’s $178.6 billion budget plan also would slash nearly $2 billion in state aid to the city and the 57 other counties around the state.

Cuomo’s Medicaid proposal would only give them a 3 percent annual increase in their healthcare costs for the poor. After that, local governments would be on their own in terms of paying for any hikes, Cuomo said.


Currently, the state picks up the entire tab as part of a deal Cuomo struck with them in 2012 that caps their local property-tax increases at 2 percent a year.

Cuomo said the healthcare change would ensure that local officials have “skin in the game” and don’t treat Medicaid spending as a “blank check” from Albany.

He dangled an additional carrot in his spending plan, which is about 1.8 percent higher than last year’s budget.


If the governments’ cost increases come in “below 3 percent, they get 25 percent of the savings,” Cuomo said during a news conference in Albany.

So they have a financial incentive and a financial disincentive.”

Mayor de Blasio is “ready to fight” Cuomo’s plan, a spokeswoman said, noting that it would have cost city taxpayers $646 million last year, when the Big Apple’s spending on Medicaid increased by 7 percent.


“Whether it’s moms turning to our public hospitals for life-saving breast-cancer screenings or first-graders learning to read in our public schools, New Yorkers should not be held responsible for the state’s Medicaid gap,” spokeswoman Freddi Goldstein said.


In addition to shifting the healthcare costs, Cuomo said the state would slash at least $2.5 billion in annual Medicaid spending by having a task force identify industry inefficiencies, as well as waste, fraud and abuse ahead of the April 1 budget deadline.

The “Medicaid Redesign Team II” — to be led by Northwell Health CEO Michael Dowling and former labor leader Dennis Rivera — will expand on an earlier effort that’s already saved taxpayers $19 billion statewide and $2 billion in the city alone, Cuomo said.


The governor’s budget plan also calls for cutting $1.8 billion in state aid to localities, including by trimming planned increases in education funding from 4 to 3 percent.

Under the plan, annual funding for city schools would increase $321 million, to $11.6 billion.

Cuomo also announced what he acknowledged would be a hard-to-pass plan to replace the formula for education funding with one that’s “truly progressive” and favors poorer schools in favor of wealthier ones.

“The current formula is designed to achieve political needs, not equity,” he said.

Additional reporting by Carl Campanile

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