Gov. Kathy Hochul is trying to rein in the state’s ballooning Medicaid spending, but she is already facing pushback from state lawmakers.

Health care is the largest section of the state’s proposed $233 billion budget.

So any talk about cutting funding spells trouble for the relationship between the governor and the Legislature.

What You Need To Know

  • Health care is the largest section of the state’s proposed $233 billion budget
  • New York’s Medicaid has grown 11% over the last year alone
  • It is now at a total of $35 billion within the state’s overall spending plan
  • A final spending plan is due April 1

New York’s Medicaid has grown 11% over the last year alone, to a total $35 billion within the state’s overall spending plan.

“Over the last three years, our Medicaid spending is up 40%. And we're trying to find ways now to save over a billion dollars in Medicaid,” Hochul said during her budget address last Tuesday.

Enrollment climbed during the COVID-19 pandemic.

The state was counting on people dropping out, but instead, future trends point to increased reliance on nursing homes and home care, areas already on the chopping block.

James McDonald, the state’s Department of Health commissioner, appealed to legislative leaders in Albany Tuesday to help find over $1 billion in so-called “savings” to cut from program spending.

“I know that finding $200 million in savings from long-term care and another $200 million elsewhere will be hard. But this is the beginning of the process, and I look forward to working collaboratively with the Legislature to identify how to achieve these savings without jeopardizing care for the New Yorkers who need it most,” McDonald said during testimony.

But lawmakers, like state Sen. Gustavo Rivera, the chair of the Committee on Health, said now is not the time for cuts.

“We should be talking about how to stabilize that system, not how to cut it further,” Rivera told NY1 in an interview.

Rivera argues that instead, the state should restructure long-term managed care and also seek federal funding to provide coverage for undocumented individuals.

“We're leaving that on the table, whether it's raising money on that, raising taxes on the wealthy, which has potentially billions of dollars,” Rivera said.

Home health aides became preferred alternatives after the pandemic to nursing homes and hospice care.

Industry workers say more cuts would be devastating.

“Home health care is the only viable solution to allow New York's elderly population to age with dignity, and it’s cheaper for the state,” said Connor Shaw, the political director for Home Healthcare Workers of America.

He also testified before the legislature Tuesday, arguing that not only is home health care a cheaper option for the state in the long run, there is already a large home health aide shortage statewide.

Fiscal watchdogs argue that without a break in the gridlock, a solution appears far off.

“It seems very unlikely to me that the governor's proposals are going to be achieved as they are now,” said Bill Hammond, senior fellow for health policy at the Empire Center for Public Policy.

“It seems to be an awful lot of pressure in the Legislature to increase. There seems to be an awful lot of pressure in the legislature to increase Medicaid spending rather than slightly decrease it as she's proposing,” Hammond added.

There’s several more weeks for the Legislature to hash out spending with the governor.