First Full Year of Local Spending Cap on Medicaid Saves New York City, Counties Nearly $200 Million

Albany, N.Y. (October 2, 2007) - Counties in New York state are sharing in savings of almost $200 million from the first full-year implementation of the cap on the counties' share of Medicaid costs, state Health Commissioner Richard F. Daines, M.D., announced today.

The state Health Department's analysis shows that 53 of 57 counties outside New York City achieved an aggregate county share savings of 5 percent. Some counties achieved savings as high as 18 percent. The Health Department anticipates that these savings will increase over time as the State continues to pick up a larger and larger percentage of overall Medicaid costs, including county administrative expenses.

For example, the cap will provide New York City with nearly $92.7 million in savings on its Medicaid bill, which would have climbed to $4.5 billion this year without the cap. Suffolk County, with the second-highest local Medicaid share, will achieve a 4 percent savings under the cap – which translates into $9.4 million in tax dollars that will be returned to Suffolk County.

"Historically, the county share of Medicaid expenditures has increased annually, and Medicaid has significantly strained county budgets for many years," Commissioner Daines said today. "The legislation limits county Medicaid expenditures, providing much-needed fiscal relief to counties after years of significant Medicaid budget growth."

In accordance with the Medicaid local share cap legislation, passed in 2005, refunds will be sent to the four upstate counties who did not achieve savings. The refunds, totaling approximately $607,000, will hold them harmless from any increase due to the cap. These counties should achieve savings under the cap in future years.

This is the first full state fiscal year for which the savings under the Medicaid cap can be calculated. These savings are for the state fiscal year that ended March 31, 2007. Some savings were paid for January-March 2006 when the bill first took effect.

In addition to the savings from the cap, the legislation authorizes county Medicaid demonstration initiatives, which are now under way. Counties can share in cost recoveries resulting from these initiatives, providing further fiscal relief to county budgets.

Medicaid Local Share Cap Reconciliation (PDF, 39KB, 1pg.)