A billion of anything is a difficult amount to comprehend. Since today we’re talking about dollars, to help visualize a billion, here’s a startling example. If someone gave you a million dollars with the stipulation of spending a $1000 a day, you’d be broke in three years. If you received a billion dollars with the same condition of spending $1000 per day, it would take over two thousand years to spend it all.
The deficit facing next year’s New York State budget is enormous. The latest reports have next year’s shortfall at $6 billion. This has all the earmarks of a spring 2020 state budget mess. It’s odd this is happening when Wall Street and the national economy is booming. Somehow during this trend of national prosperity, the NYS finances are in turmoil. There are many spending issues that are causing this considerable gap, with the most significant element being our state’s generous Medicaid system, which costs about $62 billion per year.
Because there are two health care programs with similar names that are easily confused, here’s a reminder; MedicAID assists low-income people. MediCARE is a federal insurance program that assists the elderly (65+) and disabled. Most recent data shows 1 in 3 New Yorkers, over 6 million people receive Medicaid while half that number is on Medicare statewide.
Medicaid is a federal program that funnels money to individual states, which then administer the program in their preferred manner. Just how generous is New York’s Medicaid program? Our state Medicaid spending is the second-highest in the nation, eclipsed only by California, a state which has 20 million more people.
New York’s Medicaid spending is also more than double that of Florida, a state with a higher population.
Additionally, our state spends about $21 billion more on Medicaid than Texas, which has ten million more people. Over one third of all births in New York are paid by Medicaid. Almost half of the emergency room visits in New York are paid by Medicaid. This also means about half of the ambulance transports are Medicaid patients, too.
All states must provide Medicaid funds to pay for doctor visits, hospital stays, and nursing home costs. New York, however, expands the coverage for items not covered in other states, such as dentures, eyeglasses, physical therapy, non-emergency medical transportation, and personal home care.
That last two services, transportation, and personal home care seem innocuous enough and should be monetarily low impact services. However, there is no cap on the number of people who can be in these programs, and both are ripe for abuse. Add to that the minimum wage hike for thousands of home care workers, and this has turned into a costly taxpayer-subsidized industry unto itself.
No one wants the indigent to go without proper, compassionate health care. Also, health care providers, hospitals, and nursing homes expect timely and correct payment for services. Nonetheless, Medicaid is the most significant monetary item in our state budget, and it deserves the most scrutiny for waste, fraud, and abuse to help rein in costs.
The governor’s plan last spring was to delay $2 billion in Medicare payments to providers by one month, thus spreading the payment into the next year’s budget. That chicanery only prolonged the problem and nearly doubled the amount that needs to be paid this year.
Medicare can’t take all the blame. There are other big-ticket spending items in our budget; education, metropolitan commuter transportation issues, and economic development (E.D.) initiatives. The E.D. initiatives not only draw skeptical taxpayer attention but in the past, had the interest of federal law enforcement agencies rooting out corruption. All of these programs need to be carefully reviewed with a very sharp knife.
My personal pet peeve of wasteful state spending is the assignment of hundreds of state troopers to New York City instead of patrolling rural New York as their mission states. It is not just the salary of the troopers that are being wasted, but travel and lodging costs, too. There is even money being spent renovating buildings to make permanent state police barracks in the city. Mind you, the NYPD is larger than some armies of the world. They don’t need the help, and they didn’t ask for the assistance of the troopers.
In all the difficult conversations about the budget deficit, you would think there would be more discussions on how to cut costs, scale back programs, or reduce spending. But it is actually just the opposite in Albany. Legislative discussions are on the topic of raising revenue (taxes) to expand social programs.
Last week the Assembly Majority Leader Carl Heastie (D-NYC), when asked about the budget shortfall, made this incredibly out of touch statement: “So when there’s a concern about having enough money, the two options always are do you cut spending or do you raise revenue. For us in the Assembly, we always believe in raising revenue.” Mr. Heastie appears to be challenging Governor Cuomo for the title of U-Haul truck rental spokesman of the year.