New York Medicaid History and Facts

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Initial Medicaid Implementation: New York began their Medicaid program in May 1966. New York’s existing medical assistance program under the Kerr Mills law was one of the largest in the country. Under the program the average annual cost for beneficiaries was $700 per beneficiary. When Governor Rockefeller signed the Medicaid legislation he called the program the most significant social welfare advances since the New Deal. After the bill was passed hostility grew in the public, especially in the more rural areas of upstate New York against the generosity of the benefit. The legislature held hearings on the new benefit which was opposed by farming groups, employer groups, and the medical industry, but not the medical society. The main hostility was coming from counties which had a lower average income than New York City and it was estimated that up to 70% of residents of some of these counties would be eligible for Medicaid. This opposition continued as the Department of Health and Welfare (HEW) was in the process of approving the plan. There was no reason that the federal officials could legally not approve the plan but it was estimated that the New York plan would cost the entirety of the budget of the national Medicaid program. Ultimately HEW approved the plan despite significant calls to action from Congress. Once the program began, it was estimated that two million beneficiaries or 11% of the state’s population were beneficiaries of the program. A majority of the services provided in New York City were provided by public facilities. As the new Medicaid plan was being implemented it was met with criticism from physician groups who opposed the plan to have penalties for physicians who overbill or use the program fraudulently. The program provided medical services at relatively low costs compared to states such as California that also provided generous benefits. However, the law was amended in 1967 to allow states to reduce benefits. New York took up this option and reduced eligibility to 150% of the top welfare benefit line. By this point the state had run into considerable financial difficulties and political difficulties in implementing the program. The state provided the most generous Medicaid program in the country yet the eligibility level stood at $5,000 after the state lowered the eligibility level and eliminated nearly a million people from the roles. In the end it was confirmed that 11 percent of the population of the state used the program in the first years. The state covered every optional service that was eligible for federal reimbursement. Despite this, the program suffered from a difficulty of accessing providers. Only approximately 1/3rd of New York City physicians and dentists accepted Medicaid payments.

Key Medicaid Political Issues: New York was one of the first states to receive an 1115 waiver for reform to the delivery system to reward more integrated care and social supports with the state’s hospital systems. In 2014 the DISRIP waiver promised $8 billion in federal savings that would be reinvested to improve social services. The primary goal was to reduce avoidable hospital use by 25 percent over 5 years. The state has maintained a generous and expensive Medicaid program and has over the years shifted many human services programs to the Medicaid program in order to receive the federal matching rate. The state also had high eligibility levels, reimbursement rates, and benefit coverage of all mandatory and optional benefits. At the same time the state has financed the Medicaid program through non-traditional resources such as revenue sharing in order to support existing state activities such as mental health and alcoholism treatment and fund the Medicaid program over the course of the quarter. The practice was initiated following several years of depressed state revenue. Congress has taken several measurers to end this practice by putting greater definitions on what Medicaid would reimburse.

Medicaid Expansion Implementation: New York began their Medicaid expansion with enrollment beginning in October of 2013 and coverage beginning in January 2014. New York is one of two states that has implemented a Basic Health Program for people earning less than 200% of the poverty level. The program replaced an existing state program that provided health care coverage to low-income residents who were unable to get Medicaid coverage due to immigration status. This meant that the state was able to shift a significant amount of state resources to the federal government to cover these individuals. Additionally, this population is often lower cost than the general population and that added stability to the program. During the debate over the Affordable Care Act repeal legislation, the unique way that New York finances their Medicaid program gained attention. The state, like Nevada, has counties pay for a portion of the Medicaid expenditures rather than using state general revenue.

General facts about New York Medicaid:

Medicaid program name: Medicaid

CHIP Program name: Child Health Plus (CHPlus)

Separate or combined CHIP: Combination

Medicaid Enrollment: 6.5 million

Total Medicaid Spending: $77.8 billion

Share of total population covered by Medicaid: 24%

Share of Children covered by Medicaid: 40% (estimate)

Share of Medicaid that is Children and Adults: 78%

Share of Spending on Elderly and people with disabilities: 63%

Share of Nursing Facility Residents covered by Medicaid: 62.5% (estimate)

FMAP: 50%

Expansion state: Yes

Number of people in expansion: 2,071,000 (2018 estimate)

Work Requirement: No


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