New York faces potential $1.5 billion in additional Medicaid costs, per DiNapoli

State Comptroller Thomas P. DiNapoli has warned that New York State may incur up to $1.5 billion in extra Medicaid costs due to changes in federal continuous coverage requirements. Following the end of these requirements in March 2023, New York has started redetermining Medicaid eligibility for each enrollee, a process that might not align with the Division of the Budget’s (DOB) projections.

Before the pandemic, Medicaid enrollees had to renew their coverage annually. However, the COVID-19 public health emergency led to continuous coverage requirements, preventing states from terminating coverage even for those no longer eligible. Consequently, New York Medicaid enrollment surged from 6.1 million in January 2020 to over 8 million in June 2023.

The end of continuous coverage requires the state to reassess every individual’s Medicaid eligibility over 14 months. Since the redetermination began, enrollment dropped by about 190,000 individuals, but approximately 82% of Medicaid enrollees are re-enrolling.

DOB’s Mid-Year Update projects a reduction in Medicaid enrollees to 6.9 million by April 2024. However, current trends suggest this number may not be achieved, potentially leading to almost $1.5 billion in additional state Medicaid costs for the fiscal year 2023-24. This estimate includes costs for enrollees who are higher than projected and those who renew late.

DiNapoli’s analysis underscores the financial impact of the Medicaid enrollment changes and highlights the need for the state to adjust its financial planning accordingly. The situation emphasizes the challenges in managing public health insurance programs and the importance of accurate enrollment projections for state budget planning.