Add To City's Medicaid Rolls? Mayor Must Cut Costs & Reform Aid

NO Just how big a financial headache is Medicaid becoming for the city's strapped taxpayers? Mayor Bloomberg's latest budget plan answers that question in no uncertain terms:

"Medicaid spending is one of the biggest components of New York City's budget, and costs continue to rise at a dramatic rate....The growth in Medicaid expenditures far outpaces the city's ability to raise revenue....It is imperative that the state and localities find ways to control the exploding costs of the Medicaid program."

And yet, as the Daily News reported this week, the Bloomberg administration is still doing everything it can to add tens of thousands of uninsured people to the Medicaid rolls. Thanks partly to the city's HealthStat program, total Medicaid enrollment in New York City topped the 2 million mark last year—meaning that one in four city inhabitants is now in the program. The city's share of Medicaid costs is expected to top $4 billion next year.

Mayoral aides explain the contradiction by noting that people without health insurance coverage tend to develop more severe medical problems and end up in hospital emergency rooms, leaving the city Health and Hospitals Corp. to foot most of the bill for their care. Therefore, the argument goes, enrolling the uninsured in Medicaid managed care will save money in the long run.

But HealthStat is not really about saving money. It's about insuring the working poor and leveraging more federal and state dollars for HHC—goals that inevitably make it much more difficult to balance the city budget. Whatever savings may be attributable to the program in the long run, in the short run it clearly will push up Medicaid costs at a time when the city can least afford it.

The inconsistency between Bloomberg's budget complaints and his Medicaid signup drive highlights the conflict inherent in the city government's dual responsibility for running a public hospital system while financing up to half the nonfederal share of Medicaid costs. As a result, the city's health care policy priorities over the years frequently have been contradictory, not to mention incoherent.

Unfortunately, the mayor so far has failed publicly to outline a clear and compelling agenda of Medicaid reforms that would really save money and help close the budget gap. Instead, Bloomberg's preliminary budget plan vaguely calls on the state to enact "options that establish priorities" and "recurring savings at the local and state government levels," without actually saying what he has in mind. Gov. Pataki's new budget does not appear to be very helpful in this regard—but what else is new?

It's time for the mayor to get much more specific on Medicaid reform. If Bloomberg really thinks it's possible to "control the exploding costs of the Medicaid program" while simultaneously encouraging a come-and-get-it approach to Medicaid enrollment, he's going to have to show how it can be done.