Calarco: The Medicaid budget shortfall in 2021

Suffolk County could be heading off a fiscal cliff as state lawmakers look to close a huge budget shortfall in our Medicaid spending in the 2021 budget.

Medicaid was established in 1966 by the federal government, and it has helped millions of poor and disabled receive health care. Each state is responsible for paying a portion of the cost of the Medicaid program, and Albany has passed on some of that cost to each county. Six million New Yorkers — more than 326,000 people in Suffolk County alone — receive health coverage through Medicaid. The program is lifesaving for many and an important tool in New York State’s arsenal for taking care of its residents. But proposals from some in Albany would be disastrous for Suffolk County and force our residents to pay more.

In 2011, as a response to exorbitant and unpredictable increases in property tax bills, Gov. Cuomo implemented a yearly 2-percent cap on property tax increases. At the same time, Albany implemented a cap on the amount of money that counties would pay to the state to help pay for Medicaid. This cap helped to cushion the financial blow that many municipalities would have faced due to the property tax cap. These two laws have been hugely successful at reducing the tax burden for our residents.

Some lawmakers are exploring the idea of eliminating the Medicaid cap in order to extract more money out of local governments. Eliminating the Medicaid cap will create a substantial burden that many counties will not be able to shoulder. This solution to a growing budget shortfall does not address the root cause of the problem and will only provide temporary relief for the cash-strapped state government at the cost of local taxpayers.

Suffolk County is already paying an enormous amount of money to Albany to help fund the program. In 2019 we paid $279,749,596 in Medicaid assistance. Although the state provides some relief to this burden, we still had a net payout of $243,757,451 from the county coffers. Counties across New York State sent $8 billion combined to Albany last year. By lifting the cap, we could be liable for tens of millions more at an ever-increasing amount year after year. This is a cost that will ultimately be borne by Suffolk County taxpayers.

In 2011 Gov. Cuomo convened a Medicaid Redesign Team to look into ways to reduce the enormous tax burden caused by Medicaid. One of the ideas that came out of that team was the Medicaid cap. Our own county executive, Steve Bellone, has been tapped to join the new Medicaid Redesign Team. However, before they even have a chance to thoughtfully examine the issue, some in Albany are trying to scrap the cap altogether.

The Medicaid budget shortfall is being driven by the ever-growing cost of health care in this county. It’s a problem we are seeing in every sector and for every payer. Furthermore, the federal government has underfunded New York’s Medicaid program for years, and that deficit has grown under the Trump administration. The Medicaid cap is not to blame, and shifting the burden onto local governments rather than examining the root causes of the problem is irresponsible. At the end of the day, unless we do something to reduce the cost, it will be taxpayers to whom the bill comes due.

The Medicaid Redesign Team needs time to work out a better plan, and the Medicaid cap needs to stay in place.