In mid-June 2008 a total of 44 states had reported their 2006 Medicaid data in a form acceptable as final by the federal Department of Health and Human Services. That’s where the number still stands today seven months later, and rather than wait any longer, I’ve decided to summarize and describe what we have. Unfortunately, because I like to compare New York State with surrounding states as well as the national average, Massachusetts is among the non-reporters. The data, attached in two spreadsheets, includes each state’s percent share of the 44 states’ total Medicaid beneficiaries and expenditures, and its average cost of service per beneficiary, by type of service (nursing home, hospital, etc.) and age group. Additional data from other sources are included to put those numbers in context — each state’s share of the 44 states’ population, population in poverty, population age 65 or over and in poverty (recall that Medicaid was originally a program for the poor), personal income and per capita income (which correlates with the overall cost of living and what each state can afford). The summary tables, in the worksheets titled “output,” are primed to print, and compare the 44-state total with New York State and the sum of New Jersey, Pennsylvania, Vermont, and Connecticut. The finding is that longstanding patterns remained in place in 2006, but with some new twists. A brief discussion follows.
The general finding, as always, is that New York State’s Medicaid program is vastly more expensive than both the national average and any other state. A part of this is a greater number of beneficiaries here. With 7.2% of the 44 states’ population, New York had 10.0% of its Medicaid beneficiaries, a difference only partially explained by a higher than average poverty rate — New York accounted for 8.3% of the population in poverty, and 10.3% of the population over age 65 in poverty. The adjacent states, in contrast, with 9.5% of the 44-state population, had just 7.2% of the Medicaid beneficiaries.
New York State also spent vastly more than the 44 state average per beneficiary, 70.5% more in 2006, a difference only partially explained by above the average per capita income (and associated cost of living) in New York State on average, and in downstate New York in particular. The state’s per capita income was only 19.6% above the 44-state average in 2006. In the adjacent states, per capita income was 14.5% above the 44-state average, with Medicaid spending per beneficiary 31.8% higher. In most New York State counties, moreover, per capita income has been falling relative to the national average, with the partial reversals from time to time, for 40 years. New York State owes its above average per capita income primarily to the mega-pay of the mega rich of Manhattan and a few downstate suburban counties. That mega pay is certain to be much lower in the near future, and might be significantly lower in the long term as well.
With higher spending per beneficiary and a higher number of beneficiaries, New York State accounted for 17.1% of total Medicaid expenditures in the 44 states in 2006, a burden New Yorkers had to support with just 8.7% of the 44 states’ total personal income. Add to this the fact that as a result of the federal matching share formula, the state and (uniquely in New York) local tax burden of Medicaid is 50% the total Medicaid spending in New York State (and elsewhere in the Northeast), while elsewhere in the country the federal government (including New York State taxpayers) cover a greater share. With health care in general absorbing a greater and greater share of Americans’ personal income, and Medicaid (as people become unemployed and companies stop offering private insurance) accounting for a rising share of total health care funding, the weight of New York’s excess spending grows ever greater. Much of the spending, and much of the burden, is on the residents of and businesses in New York City, particularly since (as “luck” would have it) New York State requires more local taxes for Medicaid services and beneficiaries that are concentrated in the city than it does for services and beneficiaries concentrated in other parts of the state.
The latest numbers for Medicaid-funded Inpatient Hospital care, always a controversial topic in Albany, demonstrate the whack-a-mole effort to contain the cost of the powerful Greater New York Hospital Association and Local 1199. When I first started compiling this data, New York’s Medicaid Hospital (and Nursing Home) expenditures per beneficiary were 90% higher than the national average, or nearly double. The extent to which New York is above average had been falling year-by-year, and in 2005 was down to a more reasonable 23.9% above average, closer to the difference in per capita personal income. In 2006, however, New York’s Medicaid Inpatient Hospital expenditures per beneficiary were 28.7% lower than the national average?! Clearly the fact that a couple of health care intensive states such as Massachusetts and Ohio are not included in the 2006 data cannot explain such a change.
Does this mean that in 2006 New York’s Hospitals were no longer living in the style to which they were accustomed? No — New York State accounted for 18.0% of the Medicaid Inpatient Hospital expenditures in the 44 states, compared with 8.7% of the personal income. What happened is the number of Medicaid beneficiaries of Inpatient Hospital services in New York State somehow rose from 714,185 in 2005 to 1,469,497 in 2006. How? Why? Don’t ask me. Is the data wrong? Well, according to the Medicaid Statistical Information System, it is more correct than whatever was submitted thus far by Massachusetts and Ohio, as it was accepted as final.
Other patterns remain consistent with the past. New York pays clinics an above average amount — 92.6% more than the 44-state average per Medicaid beneficiary — and physicians a below average amount — less than half the national average. And New York State accounted for only 5.7% of the beneficiaries of Medicaid-funded physician services in the 44 states, well below its share of population.
New York State provides more Medicaid funded at-home services for senior citizens than other states, accounting for 21.8% of the beneficiaries of Home Health Care in the 44 states (vs. 10.3% of poor people age 65 and older), 26.5% of total spending on Personal Care services (due to expenditures per beneficiary more that double the 44-state average), and 19.8% of total spending on Transportation services (due to expenditures per beneficiary that are 75% above average). Even so, no savings on Nursing Home care are apparent — with 10.3% of poor seniors, New York accounted for 13.6% of Medicaid Nursing Home beneficiaries and 17.3% of Medicaid Nursing Home expenditures, when compared with the 44 states. While the 27.8% above average expenditures per beneficiary for New York’s Nursing Home Care is not that far above the 19.6% above average per capita income, cross-tabulations I’ve done in past years have shown that in New York spending per beneficiary is much farther above average for senior citizen Nursing Home residents, and not as far above average for disabled Nursing Home residents.
New York State’s Medicaid expenditures for the mentally ill and mentally retarded continue to be far above average. In the case of Inpatient Mental Hospital care, this is because of a high number of beneficiaries — 27% (for those under age 21) and 26% (for those 65 and over) of the 44-state total. In the case of Intermediate Care Facilities for the Mentally Retarded, this is because of expenditures per beneficiary that are nearly triple the 44-state average.
The 44-state average for Medicaid expenditures per beneficiary by age follow a pattern that one might expect for health care expenditures by age in general. Expenditures are slightly elevated in infancy (before the body’s strength is established), low in childhood and young adulthood, rising in middle age (as health problems begin to accumulate), somewhat lower after age 65 (when Medicare picks up some of the burden), and increasingly high thereafter. The drop at age 65 would be much greater for non-Medicaid recipients, such as New York City public employees and retirees. Many Medicaid recipients have been either disabled or lifelong public assistance recipients, and thus lack the work credits to quality for Medicare, so Medicaid continues to cover the entire cost of their care. For employee and retiree health insurance, Medicare makes those over 65 much less expensive. That is why the total cost of public employee retiree health care is much greater for those who retire at age 55, ten years before Medicare, than at age 62, just three years before Medicare.
In 2006 New York State’s Medicaid expenditures per beneficiary were 65% above that 44-state average in infancy, 33% to 50% above average (roundly speaking) for those age 2 to age 44, and about double the 44-state average for those age 65 and over. The percent above average was somewhat higher for children and young adults in 2006 than in prior years. For those aged 45 to 64, New York State’s expenditures per beneficiary were “only” 28.1% above the 44-state average, but New York accounted for 16.5% of the total beneficiaries, a far higher share than in any other age group. These are people who were born between the years 1942 and 1961, and reached age 18 between the years 1960 and 1979. Much of the baby boom generation, including both its 1960s and 1970s halves, in other words. In general, New York State accounted for about 20% of total Medicaid spending in the 44 states for adults, and a little over 10% for children, across the age groups.
For those interested in going further, the data is here, and users must apply for registration and access.