Hochul’s mad Medicaid spending is meant to woo health-industry honchos — on OUR dime

Perhaps the most damning commentary on Gov. Hochul’s Medicaid spending plan — which made up roughly half of the $252 billion state budget she released Tuesday — was the silence of the attack dogs. 

Last year, the hospital lobby spent millions on TV ads falsely accusing Hochul of “cutting” the state-run health plan, which covers 7 million lower-income New Yorkers.

This year, the ad campaign has gone quiet, a sign she is giving hospitals everything they could want and more. 

This appeasement comes at a high price for taxpayers: The governor is proposing to jack up the state-funded portion of Medicaid by $6.4 billion, or 17%, in a single year — and that’s before the Legislature makes its inevitable additions. 

This comes on top of a combined 36% increase over Hochul’s first three years as governor.

When this Medicaid budget is through, it’s likely to spend 60% more than what she inherited in 2021 — which even then was the costliest Medicaid program in the United States on a per capita basis. 

Even Hochul acknowledged — in the mere eight sentences she devoted to this topic in her budget presentation — that this growth “isn’t sustainable for New York taxpayers on its current trajectory.”

Of course, she was the one who put it on that trajectory. 

Her proposed solution is “to take action alongside the federal government to manage this growth.”

Maybe she hasn’t seen the headlines lately, but Republicans in Washington are preparing to squeeze trillions in savings out of Medicaid. Bailing out a spendthrift blue-state governor is not on their to-do list. 

Another head-scratching note came from the governor’s budget briefing book.

After acknowledging that spending is out of control, it said the governor’s budget strategy consists of “maintaining Medicaid spending at current natural levels of growth.” 

Sorry, but there is nothing “natural” about Medicaid’s current spending spike. 

The state’s economy is growing, its unemployment rate is low, and the poverty rate has been trending down — all of which should mean less demand for what is meant to be a safety-net health plan for the poor and disabled. 

By way of excuse, Hochul and her aides emphasized that Medicaid enrollment remains 900,000 higher than it was before the pandemic.

They didn’t mention that enrollment peaked in 2023 and has come down by 1.1 million since then. By rights, Medicaid costs should now be falling. 

But they’re skyrocketing instead — because in Albany, Medicaid isn’t just about taking care of the needy, but increasingly about pumping money into the health-care industrial complex, often in ways that have nothing to do with the best interests of the poor or disabled. 

One of Hochul’s recent Medicaid-funded initiatives aims to “recruit and train thousands more health care workers” — even though New York already boasts the largest health-care workforce per capita of any state.

Naturally, a chunk of that money is going to the state’s largest and most influential health-care union, 1199 SEIU. 

Another growing expense consists of ongoing bailouts for financially “distressed” hospitals, which typically are losing money because patients have fled to other providers.

In effect, the state is paying failing facilities to staff and maintain their emptying wards. 

The epitome of Hochul’s spendthrift approach is a newly enacted tax on managed care organizations, a gimmick to cadge an extra $3.8 billion in federal Medicaid funding over the next two years — at which point Washington is expected to shut down the loophole that makes it possible. 

It’s a temporary shot of cash at best, yet Hochul is proposing to use it to hike Medicaid reimbursement rates for hospitals, nursing homes and other providers — leaving an expensive hole to fill when the money runs out. 

Meanwhile, her budget fails to address the health-care system’s most urgent problems. 

Where is the initiative that will finally goad New York’s hospital industry to improve their quality rankings, which sit near the bottom on national report cards? Or to shorten their average emergency-room wait time of 3 hours and 22 minutes, the fifth worst of any state? 

What is her plan for cracking down on patient neglect and profiteering in nursing homes, as exposed in lawsuits filed by Attorney General Letitia James? 

Speaking of affordability — a new Albany buzzword — why isn’t Hochul working to lower health-insurance premiums that rank among the highest in the country, driven largely by state-imposed taxes and regulations? 

The answer isn’t hard to find: The health-care industry is the single wealthiest and best-organized lobbying force in the state.

Its forces reward politicians who give them money while punishing those who dare to question the poor return on that investment. 

Hochul’s Medicaid splurge isn’t buying better care for New Yorkers. It’s buying her a reprieve from the hospital lobby’s attack ads. 

Taxpayers can only imagine how much more expensive this strategy will get in 2026, when she and the entire Legislature are up for re-election.

Bill Hammond is the senior fellow for health policy at the Empire Center.