New York Times Examines Effect of Medicaid Costs on New York Counties

The New York Times on Sept. 26 examines the financial difficulties county governments in New York state are facing because of rising Medicaid costs. The state pays 25% of total Medicaid costs, and counties contribute another 25%, with the federal government responsible for the remainder. Any time the state Legislature approves an expansion of Medicaid, local governments "pick up much of the bill," the Times reports. This year, for instance, state lawmakers approved Medicaid expansions to cover breast and cervical cancer treatment for certain women, hospice care and care for people with disabilities who return to work, the Times reports. Health costs for New York counties in 2002 rose 12% on average, and that figure is expected to increase even more in 2003. County executives say the state is merely "shift[ing] the financial burden" of Medicaid to the counties and not taking any responsibility itself for the increased costs, the Times reports. "It's giving away the store. If you could take your friends out, run up a nice bill and only pay 25 cents on the dollar, you would do it a lot," Onondaga County Executive Nicholas Pirro said. Budget aides for Gov. George Pataki (R) said the blame does not lie entirely with the state, adding that "larger trends" -- such as the rising cost of prescription drugs and the state's rapidly aging population -- are partly responsible for rising health costs. Legislative aides added that while Medicaid coverage expansions have raised counties' share of costs, the actions will save counties money in the long run because counties will no longer be entirely responsible for care costs for the uninsured who seek care in hospitals.

Counties' Problems
The following outlines the financial problems some counties face as a result of increasing health costs, as well as how some counties plan to deal with their increasing share of Medicaid costs:

• Broome County: County executives are considering a 35% property tax increase or a 25% increase in the sales tax.
  
• Erie County: Local leaders, hoping to fill an expected $120 million deficit next year, are planning to cut the county workforce by 7%.
  
• Onondaga County: A $9 million rise in health care costs has "forced" local officials to cut about 200 government jobs and raise county property taxes by 6.5%.
  
• Nassau County: New Medicaid programs have added at least $120 million to the county's budget shortfall.
  
• Chautauqua County: Medicaid costs are expected to rise 39% next year (McKinley, New York Times, 9/26).
  
• Tioga County: Local leaders are proposing a property tax increase of up to 10% in response to a likely increase in Medicaid costs of between $6 million and $7 million (Conners, Binghamton Press & Sun-Bulletin, 9/25).
  

Legislative Action
Several state legislators have said the state should begin covering the cost of programs it mandates, the Binghamton Press & Sun-Bulletin reports. Assembly member Brian Brunza (D) said, "We've got to say to Pataki, the [new programs] are nice programs, but [county] taxpayers ... cannot afford them. They cannot mandate them and not fund them." State Assembly members Robert Warner (R) and Clifford Crouch (R) have introduced a bill that would require the state to pay for all Medicaid programs over the next five years. Warner said, "It's a starting point for us. Why should we require the counties to pay the price for our decisions?" Warner and Crouch said that without support from Democrats, who control the state Assembly, chances of the bill passing are slight. According to the Press & Sun-Bulletin, even if the bill did become law, state residents still would pay for the cost of new Medicaid programs, most likely in the form of increased income taxes (Moyer, Binghamton Press & Sun-Bulletin, 9/26).