Waste of the Day: Ineligible New Yorkers on Medicaid Cost $20 Billion

Topline: An estimated 3 million New Yorkers on Medicaid or the state-run Essential Plan don’t have incomes low enough to be using the programs, according to a new report from the nonprofit Empire Center for Public Policy.

New Yorkers gaming the system

Key facts: New York is projected to spend $113 billion on the two programs in 2025, but one-third of enrollees should not be eligible. 

Data from the U.S. Census Bureau shows that only 5.5 million New Yorkers had incomes low enough to qualify for coverage last year. But there were 8.5 million people using the state’s health insurance.

That’s especially surprising given that the Essential Plan — established under the Affordable Care Act in 2015 — allows families living at 250% above the poverty level to enroll. No other plan in the U.S. is that generous, according to the Empire Center.

The average nondisabled adult costs the programs $6,600 to cover. At that rate, the Empire Center estimates taxpayers spend $20 billion each year to cover the 3 million people who should not qualify. The expense is split between the state and federal government.

Roughly 44% of New Yorkers use either Medicaid or the Essential Plan, including 60% of those in New York City. No other state has more than 37% enrollment in similar plans, the Empire Center found.

In the last 10 years, 3.7 million new people signed up for the two plans. But the number of uninsured people in New York only dropped by 1.2 million, “a sign that most new sign-ups were people who otherwise would have been insured elsewhere,” the Empire Center said.

New York spends 28% of its budget on health insurance each year.

A helping hand is one thing, but…

Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com. 

Critical quote: “A generation ago, both major political parties would have viewed growing Medicaid rolls as a problem to be solved – a sign of rising poverty and social dysfunction and an unwelcome burden on taxpayers. Now, the state’s leaders treat record-high enrollment as an accomplishment to be celebrated, a benchmark of progress toward universal coverage,” the Empire Center wrote.

Summary: Medicaid is meant to support Americans who cannot pay for private insurance, not almost half of a state’s entire population. The process for screening applicants in New York needs an overhaul.

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This article was originally published by RCI and made available via RealClearWire.