New York’s outrageous Medicaid spending needs a reset by Trump and the GOP Congress

Gov. Hochul is blaming Republicans in Congress for potential federal cuts to Medicaid, but the state’s spending on the program is off the charts and could well use some guardrails.

The best way for Congress to curb federal costs? Rewrite the law so that states like New York have more of an incentive to control growth rather than balloon it.

Indeed, New York spends a jaw-dropping $124 billion on the program, more overall and per capita than any other state.

What can Congress do? It can fix the formula that forces Washington to pick up half of New York’s costs for the program, letting Albany game the system.

Remember, Medicaid was meant as a safety-net program to cover basic medical costs for poor and disabled folks who couldn’t afford care on their own.

But over the years, enrollment and services in New York have expanded far beyond their original intent. 

That’s partly because the law allows to boost costs, with Uncle Sam picking up a share of the increase.

California, New York, and other states have learned tricks to expand the program, pleasing the health-care lobby and far-left progressives, while shifting costs to DC, but also hiking their own outlays.

Today, the feds foot 50% of New York’s Medicaid bill; the state pays 34%, and local districts — New York City and the 57 counties — cover 16%.

The Empire Center’s Bill Hammond has followed the money: New York’s high Medicaid costs are driven largely by its generous benefits, high enrollment (including of New Yorkers who aren’t poor), and nation-leading reimbursement rates to providers. For example:

• Emergency Medicaid for illegal immigrants in New York covers more than 480,000 enrollees, or 7% of enrollment.

• Spending on emergency Medicaid has more than tripled, from $207 million in 2014 to $639 million in fiscal 2024.

• Obamacare allowed Medicaid coverage for a million New Yorkers whose earnings were above the Medicaid poverty line cut-off, which, by court order, enrolls another 500,000 noncitizens.

• Over the past decade, New York has awarded $4.3 billion in health-care grants to failing hospitals that don’t even see many patients because people won’t go to them.

• Abuse runs rampant, such as with the purchase of Medicaid-funded air conditioners supposedly only for people with certain conditions, like asthma.

• Unlike every other state, New York’s Medicaid program covers infertility treatment (as opposed to diagnosis and testing).

Oh, and enrollment in the Consumer Directed Personal Assistance Program — expensive 24/7 home care for the elderly and disabled — has exploded. 

The irony is that, while Hochul blames Republicans, President Donald Trump just repeated his vow to veto any bill that cuts Medicaid benefits. So don’t expect any real pain.

But a funding shift that removes states’ incentives to continue bloating the system would save both federal and state taxpayers a bundle.

In New York’s case, in particular, it’s long overdue.