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Faso-Collins Plan: Bad For The State But Necessary For Local Government

New York’s Medicaid program is wonderful — until the time comes to pay the bill.

When Medicaid was created in 1966, the federal government said it would pay 50 percent of the program’s cost with the other 50 percent paid by the states. New York made the decision to be one of nine states to pass a portion of its costs on to its counties, splitting its burden equally with counties that it told to administer the program. The thinking was that counties would do their best to keep costs as low as possible if they were given a financial stake in the program. Fast forward 51 years, and Medicaid is a $30.6 million a year cost for Chautauqua County taxpayers, or roughly half of the county’s property tax levy.

County officials have begged for years for the state to assume the entire cost of Medicaid. State officials have demurred, though they did pass legislation to cap Medicaid costs from growing too much in a given year. The compromise was necessary because the state can’t afford the behemoth it has created. Look no further than Gov. Andrew Cuomo’s swift response to the Faso-Collins rider in the American Health Care Act. Seeking to bolster Republican support for the legislation, Chris Collins, R-Buffalo, and John Faso, R-Kinderhook, proposed ending the county share of Medicaid and putting the burden on the federal and state governments. Cuomo has come out swinging, blasting Faso, Collins and all House Republicans who voted for the legislation. Then, Cuomo said he would create a new tax, called the Faso-Collins tax, to put the burden back on taxpayers.

Forbes magazine noted in January 2017 that New York is among the wealthy states that has created methods of financing and massive programs in order to receive more federal funding than poorer states. Every New Yorker in poverty receives about $8,400 in federal Medicaid spending compared to $3,900 for comparable residents of South Carolina. Those statistics were before New York’s Medicaid expansion under President Barack Obama’s Affordable Care Act. The Forbes article also cites a 2013 House of Representatives oversight committee’s report on massive fraud and waste in New York’s Medicaid system that included roughly $15 billion in unallowable federal reimbursement over more than two decades from large overpayments received by many state-operated institutions that treated and housed Medicaid patients with developmental disabilities and a conservative estimate of $990 million to $2.6 billion in fraud when New York City allowed thousands of people to improperly access Medicaid for personal care services at an approximate annual cost of $150,000 per person.

As bad a deal as Faso-Collins is for the state, it is a good move for local governments who have no say in what is provided by Medicaid. If the Republican health care bill is passed and includes Faso-Collins, state residents should not let Cuomo get away with his hissy-fit reaction of creating a costly new tax for a program he creates. There is an easier solution — find ways to live within a realistic Medicaid budget. Creating a Medicaid program that helps people and is fiscally responsible won’t be easy or popular. But it is the right thing to do for taxpayers.

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