Governor’s Medicaid Proposals Could Create a Budget Gap for Oswego County as High as $5.6 Million

by Contributor | March 9, 2020 7:03 am

OSWEGO COUNTY, NY – Three provisions in Governor Andrew Cuomo’s proposed state budget would shift Medicaid costs from the state to the county and could create an annual budget gap for Oswego County as high as $5.6 million, according to calculations by the New York State Association of Counties.

County officials are urging residents and businesses to make their opinions on these Medicaid proposals known to state lawmakers before the state budget is adopted in late March.

Information, sample letters, and the contact information for key state leaders are available at nysac.org/medicaid.

“Instead of taking responsibility for the cost increases the state created, the Governor is trying to close his budget gap by undoing the historic 0% Medicaid cap and shifting those costs to county property taxpayers,” said Legislature Chairman James Weatherup, 9th District. “We feel that since the state has increased Medicaid coverage and costs, then the state should pay for those costs. The County Legislature adopted a resolution opposing the Governor’s cost shift at our Feb. 13 meeting. Now we need our taxpayers to speak up, too, and help stop these proposals.”

Medicaid is designated as a federal program that provides health insurance coverage for low-income persons and people with disabilities.

In nearly all states, the cost of the program is split equally between the federal and state governments.

However, for nearly four decades New York forced counties to pay half of the state’s share.

This policy caused local property taxes to skyrocket to the highest in the nation.

The state capped the counties’ payments in 2015 and has absorbed the cost increases since then.

In recent years the state has expanded Medicaid eligibility and increased rates.

Those factors, along with health care workers’ wages, caused rapid cost increases in the program, creating the state’s current Medicaid budget shortfall of $4.1 billion.

“Oswego County already sends Albany up to $25.6 million every year to pay for Medicaid,” said Legislator Jay Martino, 6th District, Chairman of the Legislature’s Finance and Personnel Committee. “That’s over half the county’s property tax levy. Oswego County’s taxpayers can’t afford another $5.6 million. It would be unsustainable and is bad public policy.”

According to NYSAC, New York’s counties and the City of New York send up to $7.6 billion to Albany for Medicaid every year, more than all the other 3,000 counties in the United States combined.

The Governor’s first proposal wants the state to intercept and keep for its own uses what is known as “eFMAP funding.”

The eFMAP funding normally flows to counties from the federal government and was included in the Affordable Care Act to help all governments that paid for the expansion of Medicaid.

Philip Church, Oswego County Administrator and Budget Officer, said the fiscal impact to Oswego County of this eFMAP intercept is significant.

In 2016 and 2017 Oswego County received $373,218 and $552,308 in eFMAP payments, respectively.

The state has failed to pay Oswego County its eFMAP credits for 2018 and 2019. The average eFMAP revenue equates to 1% on the tax levy.

“This attempt to intercept these funds is in direct opposition to the intent of Congress when they passed the Affordable Care Act, and that is why counties are urging state lawmakers to reject this proposal from the budget, and the New York State congressional delegation to hold Albany accountable,” said NYSAC Executive Director Stephen J. Acquario “It is irrational for the State of New York to intercept these funds to solve their budget crisis.”

The Governor’s second proposal allows counties to be protected by the 0% Medicaid cap only if they stay within the 2% property tax cap. If they exceed the cap, they will have to pay for the entire Medicaid increase for that year.

“This means if a county is in financial distress and must waive the tax cap, the state will make that county’s situation worse by requiring it to also pay for the state’s additional Medicaid costs,” said Church.

Church said if a county exceeds the tax cap in one year, but keeps to the tax cap the next year, the new law requires the county’s Medicaid cap to increase to the amount of the year the tax cap was waived.

“This means over time, the 2015 Medicaid cap level will increase permanently for that county, driving property taxes up indefinitely,” he said.

The Governor’s third proposal includes establishing a “floating” global Medicaid growth cap. This proposal states that if the growth in the local cost of Medicaid costs exceeds the growth cap, the county will have to pay the increase over that floating cap for that year.

“The failing of this policy is that counties don’t control the local cost of Medicaid,” said Legislature Chairman Weatherup. “The state took over the administration of Medicaid, so counties have no control over local Medicaid costs. The state hasn’t said how this ‘floating cap’ will be calculated every year, so how do we budget for that?”

“Unless counties gut non-mandated services that local people want and deserve, this floating threshold by itself will often propel counties over the 2% property tax cap,” said Church. “In my opinion, the long-term result of the Governor’s proposals will be to nullify the property tax cap.”

Additional information on the impact to Oswego County taxpayers is available at oswegocounty.com/administration.

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