Senator Morahan Announces Savings To Hudson Valley Taxpayers Under Historic New Medicaid Cap
Senator Thomas P. Morahan announced that Orange and Rockland Counties will see a budgetary savings under the first two years of the State’s historic cap and takeover of the local share of the Medicaid program. Under the new Medicaid cap -- Orange and Rockland Counties will realize a cumulative total of $13.23 million in savings over the next five years, beginning in 2006.
The substantial Medicaid savings will allow counties to limit their spending growth and provide taxpayers with significant property tax relief this year.
"The resulting savings will allow Orange and Rockland Counties to construct soundly-balanced budgets that restrain spending growth and reduce property taxes," said Senator Morahan
The specific savings for each of the counties shows the projected local Medicaid cap and the associated savings for both 2005-06 and 2006-07.:
· Orange - - $981,759 in 05-06, $5.09 million in 06-07
· Rockland - - $1.56 million in 05-06, $8.14 million in 06-07
This new law not only caps Medicaid costs, but also provides an additional one-time savings to counties by alleviating the need for local governments to budget for accrued liabilities relating to Medicaid costs.
Additionally, the New York State Department of Health has been working cooperatively with counties to develop and implement further cost savings through demonstration projects. These new projects are designed to reduce Medicaid costs and improve the delivery of health care in a cost effective manner. The county will be eligible to share in these savings.
Specifically, the new law enacted by Governor and the Legislature:
· Phases in the Medicaid cap over three years based on the county’s 2005 Medicaid spending levels.
· Establishes a cap of 3.5 percent beginning in State fiscal year 2005-06, 3.25 percent in 2006-07, 3 percent in 2007-08.
The final budget also provides support to counties outside of New York City - - where the property tax burden has had the most negative affect - - by accelerating the State takeover of local Family Health Plus costs from January 1, 2006 to October 1, 2005.
The new Medicaid reform plan will be fully implemented in 2008 when counties will have a permanent Medicaid cap not to exceed 3 percent annually. Passage of a number of Medicaid reform proposals advanced by the Governor and enacted by the State Legislature earlier this year have allowed the State to assume a greater share of the costs.
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