Folder 137

NYC 9/11 Public Portal Document

- OCT-16-2001 22:13 P.07

funds. This Maintenance of Effort (MOE) prohibits the City from decreasing its own welfare spending by more than 25% of the amount it was spending in 1994, However, since 1995, New York City has reduced its welfare rolls by 59%, creating a surplus of federal funds available to the City. A reduction in New York State's MOE requirement for FY 2002, particularly targeted to relief for New York City, will provide relief for the City of New York in the amount of up to $275 million. The Federal government should recognize New York's great efforts in reducing its Public Assistance caseload and should allow the state to reduce its own spending in this area. Since New York City does not access all of the TANF funding made available due to this MOE requirement, this proposal would not require an increased Federal appropriation.

Equity in Medicaid Funding (4 percent) New York City, which has 58 percent of the statewide Medicaid population, will spend more than $16 billion on this program in FY 2002. Since September 11, new Medicaid applications in the City have increased substantially. In addition, the City has undertaken efforts to decrease the number of uninsured children and families through its Health Stat program. The City is seeking financial relief from the Federal government in the form of an increased Federal Medical Assistance Percentage (FMAP) for the Medicaid program. This proposal builds on the findings of a General Accounting Office study that examined the fairness of the current FMAP formula. A major recommendation of the study is to substitute the FMAP per capita income calculation with a total taxable resources (TTR) assessment. TTR measures a state's ability to finance program services from the total income produced or received within a state. Per-capita income can, and in the case of New York State does, fail to capture the extent of poverty within a state. When examining total Medicaid spending across the country as a percent of total state budget expenditures, New York State ranks highest in the nation.

Under the current FMAP formula, New York and 11 other states are reimbursed at the floor level of 50 percent. New York (along with four states) spends twice the national average on Medicaid per low-income individual. Furthermore, New York spends more than double the average spending for acute services. The only other states spending at this level are those for which the average FMAP exceeds 70 percent.

If the Federal government were to increase the FMAP rate for the State of New York from 50 percent to 54 percent, the City and State could each save $276 million annually. This would help to rectify the State's unfair low matching percentage as a result of the current FMAP formula.

Restore Formula Cuts to Inpatient Rates Since 1997, Congress enacted several changes to the Medicare and Medicaid programs that have resulted in a loss of revenue to voluntary and public hospitals in New York City, which in turn has had an adverse affect on the fiscal vitality of these institutions. The Balanced Budget Amendment (BBA) enacted formula cuts to hospital rates, which were only partially restored by the Balanced Budget Refinement Act of 1999 (BBRA)

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