Legislation that has been introduced for the past seven years has been approved by the state Senate – but not before Democrats defeated an amendment introduced by Sen. George Borrello.

The state Senate approved S.353, sponsored by Sen. Gustavo Rivera, D-Bronx, by a unanimous 62-0 vote. The legislation allows appointment of a state Medicaid director by the governor with consent of the state Senate.

“New York state’s Medicaid program now serves 1 in 3 residents and spends over $90 billion a year. Medicaid funding is used to support services available through the Department of Health, the Office of Mental Health, the Office of Addiction Services and Supports, and the Office for People With Developmental Disabilities,” Rivera wrote in his legislative justification. “The federal government contributes funding to the state’s program and has a role in overseeing it. Each state has a designated Medicaid Director. New York’s Medicaid director serves as a deputy commissioner within the Department of Health.”

Borrello introduced an amendment prior to the Senate’s passage of S.353 that would have required an independent audit of state spending programs, including Medicaid, and referring any fraud, waste or abuse to relevant law enforcement agencies; and conducting a comprehensive reverification of the state’s Medicaid rolls.

“I think the chamber should absolutely be approving someone who has control of what is now approaching nearly half of New York state’s budget,” Borrello said on the Senate floor. “Right now, Medicaid accounts for $115 billion of a $260 billion budget proposal. So what our bill actually calls for, this amendment, is for us to qualify and ensure that the people that are getting Medicaid benefits actually exist and they are qualified. And also we need to do a comprehensive audit. Medicaid has gotten out of control here in New York state. It’s costing New York state taxpayers literally billions of dollars.”

Borrello cited a November 2024 report released by the Empire Center for New York State Policy that found 44% of the state’s population, including 60% of New York City residents, were enrolled in state-sponsored coverage through Medicaid or the Essential Plan as of September 2024. New York’s 44% coverage rate was seven points higher than any other state, and 20 points higher than the national average. More than 3 million enrollees appear to have incomes above the eligibility limits for either Medicaid or the Essential Plan, based on analysis of Census data.

The report said that for every one person who stopped being counted as uninsured over the past decade, the state added more than three people to either Medicaid or the Essential Plan. New York offers zero-premium health coverage to residents up 250% percent of the poverty level, the highest eligibility threshold in the U.S.

Empire Center officials called for an audit or study to document the demographics of the enrollees and how they meet with the programs’ eligibility guidelines. At a minimum, the Empire Center suggested, the state Health Department should release more data about the income profiles of enrollees to allow better public understanding of how the rolls have gotten so large.

The Empire Center found that an estimated 5.5 million New Yorkers meet eligibility requirements for Medicaid, state enrollment is 8.5 million – indicating the potential of 3 million ineligible enrollees. An audit by state Comptroller Thomas DiNapoli released in December found the Department of Health may have improperly paid over $2.6 billion in Medicaid payments to people not living in New York. And, after reports of fraud in Minnesota, state Republicans called on Hochul to start a comprehensive, independent audit of the state’s spending programs, with Sen. Rob Ortt, R-Buffalo and Senate minority leader, introducing legislation (S.8661) to require one.

“We need to do this now,” Borrello said on the Senate floor. “It is unbelievable that it is swelled as much as it has and it is now nearly half of New York’s budget. If any part of our budget needs to be evaluated and cleaned up, it is Medicaid. That’s why this amendment to this bill is germane and needs to be done as soon as possible. The taxpayers of New York state deserve transparency, honesty and restoring integrity to the most expensive system in New York state and the most expensive system in the United States of America – New York’s bloated and fraudulent Medicaid system.”