On January 16th, Governor Kathy Hochul announced highlights from her third Executive Budget, covering New York State Fiscal Year (FY) 2025, which will run from April 1, 2024 to March 31, 2025.
The State expects total Medicaid costs to be about $96.4 billion in FY 2025, including $52 billion in federal spending and $35.5 billion in State spending. This is down from almost $100 billion in FY 2024, owing to enrollment reductions associated with the unwind of the Covid-19 public health emergency (PHE). However, the State no longer projects Medicaid enrollment to return to pre-PHE levels, accounting for an additional $1.6 billion in new Medicaid costs over the life of the Financial Plan. As a result, the Budget sets a target of making $200 million in Medicaid long-term care savings and $200 million in other Medicaid savings, to be defined as part of a stakeholder process.
The Budget includes various important health proposals, including many of those outlined in the Governor’s State of the State:
- A safety net hospital transformation program to “encourage partnerships that improve the resilience of and preserve long-term access to safety-net institutions”, and the allocation of $500 million from existing capital programs for this initiative;
- Implementation support for the State’s new 1115 Medicaid waiver amendment;
- Funding for 200 new psychiatric inpatient beds (State-operated inpatient beds and Transition to Home beds);
- Increases to Medicaid rates for mental health services provided in Article 28 clinics and private practices;
- New mental health parity enforcement authority;
- Scope of practice enhancements for a variety of professions;
- The elimination of cost-sharing for insulin across all regulated insurance plans; and
- Emergency medical services reforms, including the creation of a Paramedic Urgent Care program offering telehealth in rural areas.
SPG’s detailed summary of the budget is available here. The full Budget materials are available here. As always, please feel free to contact us with any questions.