Empire Center: Medicaid spending up 60% since 2022
A weekly COLUMN by NY State Senator Tom O’Mara
It’s no surprise that the focus at the highest levels of government in New York State throughout the start of this new year has fallen squarely on how to spend more taxpayer dollars – and consequently, because this is what always goes hand in hand with increased spending, finding more ways to reach into the taxpayers’ pockets to pay for it.
From a climate agenda leaving ratepayers in the dark and out in the cold, to a system of Medicaid that lacks accountability and transparency yet continues to demand more and more from state and local taxpayers and governments, we are witnessing a system of government, along with the bureaucracy that’s been built up around it, coming apart, running out of choices, and perpetuating this state’s decline.
And New Yorkers cannot forget that it’s all taking place under the watch of a state government in Albany that, since 2019, has been under the thumb of total one-party, all-Democrat control of every statewide elected office and both houses of the State Legislature operating without traditional checks and balances, and taking full advantage of it.
Exhibit A of what’s going on is the latest move out of Albany to deliver an additional $1.5 billion of state taxpayer dollars to bail New York City’s freshly minted regime out of its own multi-billion-dollar budget deficit. It’s a bailout delivered with no strings attached, with no demands for greater accountability or responsibility in the city’s finances. It’s delivered into the coffers of the city’s new Democratic-Socialist Mayor Zohran Mamdani to do with as he pleases which, as he makes it perfectly clear, is to remake the greatest city in the world into a socialist ideal – and to continue demanding higher property taxes, higher income taxes, higher corporate taxes, or whatever else it will take from taxpayers to pay for it, including billions and billions more from state tax dollars.
It represents an accelerating erosion of the best interests of hardworking, middle-class state and local taxpayers in every corner of this state in a relentless raid on taxpayer dollars to fund a far-left, radical agenda of questionable priorities and never-ending handouts pandering to various voting blocs.
Keep in mind, as well, Exhibit B; Listen to some of what’s been discussed at the joint Senate-Assembly public hearings on Governor Hochul’s proposed 2026-2027 Executive Budget, particularly on a clean energy agenda that everyday ratepayers can’t afford or on Medicaid spending that has gone off the rails.
I’ve made it clear in this column for a long time now, including over the past few weeks, that New York State’s clean energy agenda under the “Climate Leadership and Community Protection Act of 2019” (CLCPA) isn’t affordable, feasible, or reliable.
For this week, let’s focus on Medicaid which, in my view, puts a spotlight on what plagues this state government’s entire approach to governing.
At a recent budget hearing, Bill Hammond, Senior Fellow at the Albany-based Empire Center for Public Policy and a highly regarded expert and fiscal watchdog on New York State’s Medicaid system, stated in written testimony, “For the fourth year in a row, the governor has used the word ‘unsustainable’ to describe the growth rate of her own Medicaid budget. It’s hard to dispute that assessment. Since 2022, the state share of Medicaid has soared by 60 percent, or roughly five times the inflation rate. That increase amounts to an additional $16 billion per year on top of what was already the highest per capita Medicaid spending in the U.S. With federal aid included, total Medicaid spending is up by $28 billion annually. The executive proposal would continue the unsustainable upward trend, increasing the state share by another $4.3 billion or 10 percent, almost four times the rate of inflation. This raises the question of what those additional tens of billions are buying for the people of New York.”
Hammond’s testimony continues, “Instead of simply pouring more tax dollars into an already well-funded health care industry, the state’s leaders should be looking for ways to constrain Medicaid costs and achieve better value for consumers.”
Medicaid spending may very well stand as the crown jewel of out-of-control spending in New York and yet accompanying state efforts to rein in this spending, to make it more efficient or effective, or to root out the abuse, fraud, and waste in the system have, at best, been given a back seat as far as priorities are concerned (a lack of diligent oversight that many of us have railed against for years now).
In short, there’s been a glaring lack of interest in taking actions to make this system more responsible to taxpayers, particularly over the past several years during which, as Hammond rightly highlights, state spending on Medicaid has skyrocketed by 60 percent, an untold portion of which is going to provide taxpayer-funded health care to illegal immigrants.
And to address Hammond’s question of what these “additional tens of billions are buying for the people of New York,” our Senate Republican Conference stressed in early January that the time has arrived for a no-holds-barred investigation into answering that question.
Our belief is straightforward: There have been alarming reports of widespread fraud involving taxpayer dollars in the state of Minnesota and other places across the nation. Wouldn’t it be common sense here in New York to take a fresh look at our own state government considering what we’re reading and hearing about what’s been going on in other places?
We have called for an independent audit that would ensure New York’s taxpayers, without a shred of doubt, that their tax dollars are being allocated, distributed, and spent in the most responsible, effective, legal, and accountable ways. That’s especially true within the Medicaid program which now costs taxpayers approximately $120 billion annually, nearly half of the entire state budget. An audit like the one we’re calling for should be one of Governor Hochul’s top priorities and it should be done without delay.
In a January 2nd letter to the Governor, we wrote, “Given that New York administers comparable programs involving billions of taxpayer dollars, it is imperative that proactive measures be taken to ensure similar abuses are not occurring here.”
Over the past year alone, for example, reports have shown:
- $68 million in Medicaid fraud committed by a Brooklyn adult daycare operator uncovered by the federal Department of Justice last August;
- the State improperly paid over $2.6 billion in Medicaid premiums for people who do not live in New York;
- $13 million in Medicaid fraud for transporting patients to medical appointments; and
- $7 million in Medicaid fraud for fraudulent billing.
During his recent testimony before our budget panel, Hammond pointed out that New York would rank near the bottom of all states in the nation statistically in the number of investigations into Medicaid spending per every billion dollars spent on Medicaid.
I asked him what more New York State can and should be doing to root out abuse, fraud, and waste in the system?
“We should be doing more investigations,” he answered.
