DiNapoli says state Medicaid has a $1.5B budget shortfall

Comptroller Thomas P. DiNapoli has raised concerns about a potential $1.5 billion shortfall in the state’s Medicaid budget. The issue stems from the recent end of a federal policy that maintained continuous Medicaid coverage during the pandemic. This change means New York must reassess whether millions of people still qualify for Medicaid.

Medicaid, a program providing health coverage to low-income individuals, saw its enrollment in New York surge to 8 million during the pandemic, a 31.5% increase since January 2020. With the federal requirement now lifted, New York began redetermining eligibility in early 2023, which could lead to some people losing their coverage. DiNapoli warns that if enrollment does not decrease as projected, the state could face unexpected costs.

Currently, the state’s financial plan expects Medicaid enrollees to drop to 6.9 million by April 2024. However, recent trends suggest this target might not be met, possibly leaving the state with higher-than-expected expenses. DiNapoli’s analysis highlights the risk of increased costs if enrollment does not decline as rapidly as hoped, and if individuals who fail to renew on time but rejoin later are higher than expected.

This situation presents a significant challenge for New York, as it may need to find additional funds to cover these unforeseen Medicaid expenses.