Let Local Governments Control Medicaid Spending

By Erie County Executive Chris Collins

Nearly every dime Erie County (New York’s largest Upstate county) collects in property taxes goes directly to New York state for Medicaid services.  Medicaid does provide a vital safety net for our most vulnerable citizens.  But there is no other way to describe the current program other than unfair and unsustainable for our counties and our state.  That is why I believe New York must give local governments more flexibility to control Medicaid costs and lower property taxes.

In Erie County, the 2010 local share of Medicaid was approximately $201 million.  By comparison, Erie County’s property tax levy in 2010 was $211 million.  Nearly 96 percent of the county’s entire property tax levy went to pay for Medicaid costs.  In addition, Erie County’s Medicaid tab will increase by $6 million in 2011.  The entire Medicaid program cost for Erie County is more than $1.4 billion, including local, state and federal share.  That breaks out to nearly $1,500 for every man, woman and child in our community.

As many of you know, in addition to the federal mandates, New York offers nearly every non-mandated Medicaid service.  The expense of these optional services costs Erie County taxpayers an additional $250 million in state and local Medicaid share payments.  These optional services are why New York is well known for having a “Cadillac” Medicaid program, and in this era of tough fiscal times, taxpayers are demanding a Chevy, not a Cadillac.

That is why I am asking state lawmakers to introduce “opt-out” legislation.  This legislation would allow local municipalities to “opt-out” of the Medicaid services not mandated by the federal government.  Through local law, approved by the local legislative body and executive, municipalities would determine what optional Medicaid programs to provide to their citizens.

The immediate and tangible results of this legislation are dramatic.  In Erie County alone, taxpayers would see an $80 million/40 percent reduction in their local property tax bill.  When you factor in the entire state, the savings are enormous and would provide a real pathway toward fixing the daunting financial challenges facing New York State.  In his recent State of the State address, Governor Andrew Cuomo talked at length of the necessity to reform our Medicaid system and I recently sent the governor and every member of the state legislature a letter detailing this legislative proposal.

Reforming Medicaid has proven incredibly difficult, in large part, because it is nearly impossible to get all the diverse, but necessary parties to agree on statewide reforms.  This legislative solution is not one size fits all, and instead, allows local governments to tailor a program to fit the needs of their residents and balance that with the ability of their taxpayers to foot the bill.  County governments are drowning in Medicaid costs.  The least New York state can do is allow these same governments to build their own life raft.

One Response to “Let Local Governments Control Medicaid Spending”

1. JAG says:

   March 22, 2011 at 8:46 am

   Nice theory, but likely poor practice in New York State with Albany in control of this “Mercedes” mandate. Let’s try to put all new recipients on federal minimum Medicaid, and let all 62 counties start on a level playing field. When recipients renew, they could also go to the federal minimum with 15 benefit add-ons and avoid the race to the bottom by urban counties such as Erie and Monroe. That would leave rural counties choking on the flight of recipients to them. Since we are all in this morass of over spending and over benefiting, we should all be included in the reform and redesign process. – Jay A. Gsell, Genesee County Manager

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