Onondaga County could lose $11 million in federal healthcare funds earmarked to reimburse municipalities for Medicaid costs under Gov. Kathy Hochul’s 2024 budget proposal.
In the $277 billion state budget, as currently proposed, the state would divert an estimated $1 billion in federal Medicaid funds that counties were to receive over the course of next year. Onondaga County’s share amounts to $14 million, but the county typically receives around 80% of that, said Steve Morgan, the county’s chief fiscal officer.
Hochul’s budget proposal is up for approval by the state Legislature by April 1.
Counties for 20 years have received some version of Medicaid reimbursements from the federal government through New York state. The funds grew when the Affordable Care Act passed in 2010, resulting in the expansion of Medicaid to provide coverage to more Americans. Prior to the passage of the ACA, Morgan said, the federal government reimbursed around 50%of Medicaid costs for counties. That figure rose to close to 90% after the bill passed and states expanded the program.
Lawmakers have dubbed the increased aid to localities “enhanced Federal Medicaid Assistance Percentage.” It has existed for around a decade in its current form.
New York pays one of the highest shares in the country for its Medicaid program. A report from the Office of the State Comptroller indicates the state paid about $27.7 billion in Medicaid costs in fiscal year 2021-2022. This is the highest level of spending in the history of the state, according to a report from the comptroller’s office, which attributes the high spending in part to higher enrollment levels impacted by federal restrictions on disenrollment during the COVID-19 public health emergency.
Justin Sayles, spokesman for Onondaga County Executive Ryan McMahon, said in an email the withholding of eFMAP funds could have fiscally devastating effects.
“It is our firm belief that it is illegal,” he said. “We remain cautiously optimistic that the Legislature will do the right thing and remove this from the governor’s budget.”
New York Association of Counties President Michael Zurlo in a press statement warned taxpayers they would feel the budget shortfalls created by withholding eFMAP payments.
“As a former county official, Gov. Hochul should know that any new costs imposed on New York’s local governments eventually come out of New Yorkers’ pockets in the form of higher property taxes that drive up the cost of both rent and homeownership,” Zurlo said.
Sayles said Onondaga County is still exploring how it would pay for the unexpected cost. He said lawmakers do not foresee slashing budgets for other county services.
“However all options remain on the table,” Sayles wrote in an email.
The county will avoid raising property taxes, Sayles said.
“We have not raised property taxes in nearly 10 years and have no intention of doing so going forward,” Sayles said.
The county could realize some savings from the proposed closure of the Jamesville Correctional Facility. County Executive Ryan McMahon previously estimated taxpayers could save $5 to 10 billion if the facility is shuttered.
Sayles said the county administration did not see the two issues as connected.
“This is a huge liability that the state is potentially and illegally passing on to counties,” Sayles said, “and would certainly require a serious reevaluation of our budget and how we fund certain programs and initiatives.”
Matt Janiszewski, the governor’s press secretary for upstate matters, said in a statement that Hochul understands the financial hardships placed on county governments, arguing that the 2024 budget proposal makes up for the loss of eFMAP funds in other ways.
Specifically, Janiszewski pointed to about $6.2 billion in funding to youth programs and homeless shelters for counties outside of New York City.
Added to that, Janiszweski said, is a surge in aid for local schools. For example, in total, school districts in Onondaga County could receive around $110 million more than last year, if the state’s projections hold.
Janiszewski noted the state has not adjusted eFMAP funding since 2015, shouldering about $1 billion annually that would otherwise be passed to localities.
The local share of Medicaid has been somewhat consistent since at least 2017.
Counties have contributed between $7.9 billion and $8.5 billion to program-related expenses. Part of this is because the federal government has boosted eFMAP funding in the last two years due to the COVID-19 epidemic. The OSC report notes that in the fiscal year 2021-2022, the federal government lowered state Medicaid costs by $3 billion, as well as helped shoulder the local share to the tune of $645 million.
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