Hochul Proposes Medicaid Expansion for Seniors and Disabled, Marking a Shift From Past Governors
Governor Kathy Hochul delivers the 2022 State of the State address at the State Capitol, on January 5, 2022. | Darren McGee/Office of Governor Kathy Hochul

Hochul Proposes Medicaid Expansion for Seniors and Disabled, Marking a Shift From Past Governors

Two proposals in Governor Kathy Hochul’s State of the State would constitute the most significant expansion of New York’s health plan for low-income individuals in years.

A pair of proposals outlined in Governor Kathy Hochul’s State of the State policy recommendations could be the largest expansion of New York’s Medicaid program since the passage of the Affordable Care Act.

The first proposal would raise the maximum income that Medicaid beneficiaries who are also enrolled in Medicare are permitted to earn, and the second would do the same for savings. Together, Hochul says they would allow as many as 200,000 additional low-income New Yorkers to access Medicaid coverage, the primary state-funded plan to provide low-cost health coverage for low income people.

Most of these individuals would be senior citizens or have disabilities, two categories which currently have stricter eligibility requirements for the state’s Medicaid program.

Medicaid is the second largest expense paid by New York State, and is projected to cost the state $27.8 billion next year, over an eighth of the entire state budget. New York’s Medicaid program costs more per capita than Medicaid in most other states, in part because, unlike many other states, it covers prescription drugs, vision, and dental care.

Governor Andrew Cuomo had long sought to rein in Medicaid spending. He made repeated cuts to New York’s Medicaid program, beginning in his first year in office. These cuts continued through the Covid-19 pandemic; in spring 2020, Cuomo cut $138 million from New York City’s public hospital system and threatened to forgo $6.7 billion of federal Medicaid funding in order to implement further cuts.

Cuomo shared that approach with his predecessors, said Assemblymember Richard Gottfried (D-Manhattan), who has chaired the chamber’s health committee since 1988.

“Almost every budget that I’ve dealt with as chair of the health committee has been a major fight trying to avoid cuts in the Medicaid program,” he told New York Focus. “So many governors and governors’ budgets have treated the Medicaid program almost with hostility.”

But Hochul’s proposals mark a break with this past, Gottfried said. “She talks about the Medicaid program as a positive force in our healthcare system, and regards it as an investment and not an annoyance,” he said. 

Hochul has not yet made clear how she will pay for the proposed expansions, and one healthcare analyst noted that the budget could still include cuts to other parts of Medicaid.

“The tradition is for governors to talk about all the fun, attractive things that they’re going to do in the State of the State speech, and then deliver the bad news in the budget,” said Bill Hammond, senior fellow for health policy at the Empire Center, a conservative think tank. “It’s possible that she has some kind of program of cost control that she’s going to lay out.”

Gottfried said he doesn’t think that will happen. “From everything we’ve heard so far, I do not expect to see Medicaid cuts in the budget,” he said.

Some analysts suggested that the expansions may cause the state to exceed the Medicaid Global Cap, a policy implemented in 2011 that restricts annual growth in the state’s Medicaid program. (Both houses of the legislature proposed scrapping the cap last year, but the proposal did not make it into the final budget.) Even without Hochul’s proposed expansions, the state is already projected to exceed the cap in the next several years, noted Patrick Orecki, director of state studies at the Citizens Budget Commission.

“Fiscal sustainability of the program is a concern,” Orecki said of the expansions. “The main question is how it fits into the budget overall, and how it fits into managing the Medicaid program’s budget.”

Asked about the projected cost of the programs and whether the costs could cause Medicaid to exceed the cap, a spokesperson for the governor’s budget office said that more financial details would be available in Hochul’s executive budget, which she will release later in January.

Historically, senior citizens and disabled people in New York have been subject to two restrictions on Medicaid eligibility: an income limit of roughly 84% of the federal poverty level ($11,200 for a single adult in 2021) and a limit on total assets of $15,900. (Some assets, such as residences, are excluded from the limit.)

The Affordable Care Act, also known as Obamacare, expanded Medicaid eligibility by raising the income limit to roughly 138% of the federal poverty level ($17,775 for a single adult in 2021) and removing asset limits for many Medicaid beneficiaries. But the ACA’s Medicaid expansion excluded people who were already eligible for Medicare — namely, seniors and disabled people. As a result, the lower income limit and the asset cap have remained in place for these groups.

When individuals with incomes or assets beyond those limits turn 65 or become disabled, they lose their Medicaid status, and must instead enroll in Medicare, the federal government’s insurance program for senior citizens and disabled people. 

This means that they also lose the ability to access several categories of care that New York’s Medicaid program provides, but Medicare does not: hearing, vision, and dental care, and, particularly importantly for seniors and disabled people, home and long term care. 

Enrolling in both Medicare and Medicaid allows continued access to those services, but people covered by Medicare but not Medicaid must purchase pricey supplemental plans, which can cost thousands of dollars per year, a sum out of reach for individuals at or near the poverty line.

This risk of low-income New Yorkers losing Medicaid coverage due to age or disability has been on hold since the federal government declared Covid-19 to be a public health emergency in January 2020, due to federal regulations preventing states from disenrolling Medicaid beneficiaries during the emergency.

In New York, this prohibition has led to over 50,000 people maintaining their Medicaid coverage despite being technically ineligible, according to Valerie Bogart, a lawyer who directs the Medicaid program of the New York Legal Assistance Group. For months, she and other health advocates have been bracing for that population to lose access when the public health emergency ends. At the same time, they’ve been lobbying state government to expand eligibility parameters.

The policy changes laid out yesterday will prevent such losses of coverage for most people.

Bogart said Hochul’s proposals would avert severe public health costs. Removed from Medicaid rolls, she said, “people stop going to the doctor, stop filling prescriptions, stop getting preventative care. You don’t go for that test to find out if you have cancer, because you don’t want to know, because you can’t pay for the treatment.”

Hochul’s proposals contained another measure expanding postpartum Medicaid access from sixty days to a year, a measure that Gottfried has pushed for several years.

Also included was the creation of an office to be called the Center for Medicaid Innovation, which will focus on using “innovative digital health technologies and solutions” to improve quality of care and lower costs, which Gottfried and others said they were waiting for more details on before evaluating.

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