Medicaid Funding

Medicaid Reimbursement Rates to Cover the Full Cost of Care and Increase Financially Distressed & Safety Net Funding

New Yorkers rely on their hospitals, and hospitals rely on healthcare workers. Across the state, hospitals are the heart of their communities—as well as some of the biggest employers in their regions— but right now they are struggling to survive - threatening patient care and exacerbating the staff crisis. Workers and patients are paying the price. With Federal funding on the line, it’s more important than ever to ensure robust State investment in Medicaid and our hospitals and other healthcare facilities.

THE PROBLEM 

• Some hospitals across New York State are struggling financially and are on the verge of being shut down or key services being eliminated.
• Because reimbursement for Medicaid doesn’t cover the full cost of care, the current system relies on subsidizing underpayment of Medicaid from the State through private commercial health insurance payment. This increases costs for all of us and greatly threatens care for the 7 million New Yorkers who rely on Medicaid.
• The Medicaid gap means that hospitals have to cut costs and the biggest cost for hospitals is
  labor.
• This means hospital systems have an economic incentive to keep their healthcare worker staff
  small as possible. And when their finances become tight — such as when a global pandemic force them to cancel money making elective services — nursing and other labor costs are often targeted for cuts, worsening short staffing.

THE SOLUTION 

Governor Hochul’s FY26 Executive Budget is a good start in making needed investments in hospital funding. However, in order to protect our hospital system, and ensure care for all New Yorkers, it is vital for the legislature to increase Medicaid reimbursement rates to cover the full cost of care and continue investing in funding that supports financially distressed and safety net hospital.