Gov. Kathy Hochul’s budget proposal includes a massive boost to Medicaid spending that’s already dramatically outpacing other states — but Dr. Oz could shake up her plan to tap into a nearly $10 billion trust fund already on New York’s books.
Hochul is proposing to hike Medicaid spending by 11.4% in her $260 billion budget proposal — another $3.9 billion from the current spending plan with the Empire State already dishing out 46% above the federal average.
Spending has tripled in the last 15 years and increased $15 billion under Hochul’s tenure largely due to New York’s policy that the program pay more for additional prescription benefits and coverage of home care services.
But former TV star turned the Trump administration’s Medicaid boss Dr. Mehmet Oz could issue a decision that could shake New York’s entire state budget because a large portion of the 1.8 million residents on the “Essential Plan” aren’t US citizens, which is now barred from federal bucks under last year’s “Big Beautiful Bill.”
There are about 1.8 million New Yorkers on the plan including more than 700,000 green card holders and other “permanently residing non-citizens.”
“Given how many people depend on this program for their health care, and given the possibility that that health care could be going away in the very near future, the governor and the rest of the state owe them a lot more clarity about what’s going to happen and why,” said Bill Hammond, Senior Fellow for Health Policy at the Empire Center for Public Policy.
Hochul appears to be relying on getting federal permission to tap into a massive $9.6 billion pile of cash sitting in a state trust fund to help pay for people’s essential plan benefits for roughly two years.
Under the Trump administration policy, the state can no longer support non-residents with federal dollars, however a state court ruling mandates the state provide health insurance coverage of some sort to many of them. That will force them onto Medicaid, with the state estimating costs of doing so of around $3 billion.
Assembly Speaker Carl Heastie acknowledged how serious the feds’ leverage over the decision is on New York’s budget.
“If not, we have a really big problem,” Assembly Speaker Carl Heastie (D-Bronx) told reporters Wednesday, asked about the state relying on federal approval to tap into the trust fund, which accumulated from federal dollars being pumped into the essential plan in recent years.
Oz, the administrator for the Centers for Medicare and Medicaid Services, reached as he attended the World Economic Forum in Switzerland, declined to weigh in on the situation. His press shop didn’t comment when reached Wednesday afternoon.
“New York’s Medicaid spending is off the charts,” said Chris Pope, Senior Fellow for Health Care policy at the Manhattan Institute.
He said New York was the most aggressive state in expanding Medicaid and public health insurance going back to the Obama era, and is now paying the price with the Republicans in control of Congress and the White House looking to rein in spending.
“New York was in the crosshairs for overspending,” Pope added.
“This budget does nothing to change New York’s outlier status. In fact, it’s probably going to make it worse,” Hammond said.
“After all of the alarms that were raised about how drastically H.R. one was going to slash funding for New York, Medicaid funding is due to go up, not down, in the year ahead,” he added.
Jensen said he thinks the state needs to take a real “forensic look” at Medicaid.
“We have a very expansive system where we cover probably a lot of things that other states aren’t,” Assemblyman Josh Jensen (R-Monroe), the top GOP member on the Assembly Health Committee said.
Jensen said he’s open to tapping into the trust fund if it means keeping costs reduced for those on the essential plan currently, but he’s been kept mostly in the dark on the governor’s plans, even as she’s supposedly appealing to Republicans for help convincing their colleagues in Washington to lessen the pain on the Empire State’s budget.
“That continues to be an open question,” Jensen said.
Hochul’s office and the Department of Health refused to answer questions from The Post about how it intended to proceed with the essential plan. Hochul spokesperson Nicolette Simmonds however provided a statement bashing Trump and Republicans, apparently forgetting who needs to approve the state’s plan.
“The Governor will continue to fight back against these devastating cuts, but real people will lose coverage due to the heartless decisions by Trump and New York’s seven Republicans in Congress,” the governors’ spokesperson wrote.
The post Hochul’s proposed budget includes massive Medicaid spending, but Dr. Oz could sink NYS’ funding options appeared first on New York Post.
