Governor Hochul’s FY 2024-25 Executive Budget Proposal
On Tuesday, January 16, the Governor released her $233 billion FY2024-25 budget proposal, an all funds spending increase of 4.5% from last year. Governor Hochul prioritized bolstering the State’s reserves, which currently sit at just over 15% of operating costs. The Executive Budget supports the implementation and expansion of various initiatives laid out in the Governor’s State of the State plan presented to the Legislature on January 9, 2024, and continues funding for existing commitments, including support for Medicaid and distressed hospitals and increases in the minimum wage. In FY 2025, Department of Health Medicaid spending is projected to total $30.9 billion, an increase of $3 billion (10.9%) from the revised FY 2024 levels, including over $1 billion in savings proposals. State-share Medicaid spending, including administrative costs, is projected to be $8.6 billion (39%) higher in FY 2025 than the levels recorded three years prior in FY 2022. Medicaid is the single largest category of Federal funding, representing 59% of Federal resources anticipated in the FY 2024-25 Executive Budget. The FY 2024-25 Executive Budget reflects the continuation of the Medicaid spending cap enacted in FY 2012, as updated, and recommends funding consistent with last year’s update to the allowable growth calculation. The Global Cap spending limit is set by the five-year rolling average of Medicaid spending projections within the National Health Expenditure Accounts produced by Office of the Actuary in the Centers for Medicare & Medicaid Services. Consistent with the index, the FY 2024-25 Executive Budget reflects $15.6 billion in additional Medicaid spending growth between FY 2024 and 2028 as compared to the prior Global Cap growth metric. The following is a summary of certain initiatives included within Governor Hochul’s FY 2024-25 Executive Budget:- Medicaid Rate Adequacy: No proposed decrease to rates. However, the Executive Budget calls on the State to maximize the use of available resources while working with long-term care stakeholders to identify at least $200 million in recurring State share savings across New York’s many long-term care programs (“Unallocated Reduction”)
- Medicaid Section 1115 Demonstration Program Waiver: $7.5 billion in funding over the next three years ($6 billion Federal, $1.5 billion state) through an amendment to the 1115 demonstration program to support a comprehensive series of actions to advance health equity, reduce health disparities, and strengthen access to primary and behavioral health care through better integration of services. The waiver also includes $550 million in annual funding to support the transition of distressed providers to a new model of care utilizing global budgeting.
- Cost-of-Living Adjustment: An additional annualized $3.4 million to provide a 1.5% COLA for State Office for the Aging programming.
- Healthcare Workforce: CMS’ waiver amendment approval allows New York to make large investments across a series of wide-ranging Medicaid initiatives, including long-term, sustainable investments in the state’s health care workforce, including:
- The establishment of innovative career pathway training programs for front-line health and social care professionals that will increase access to culturally appropriate services. These programs will train and educate for the purpose of creating a reliable healthcare workforce pipeline to address workforce shortages, as well as increasing opportunities for employment and career advancement; and
- A loan repayment program for certain healthcare workforce professionals who commit to working in community-based practices in underserved areas, including dentists, psychiatrists, and clinical nurse specialists.
- Out-of-State Nurses: Allows New York to join the Interstate Licensure Compact and Nurse Licensure so nurses and physicians licensed in other states may practice, either physically or virtually, in New York.
- Certified Medication Aides: Allows for the expanded scope of practice for medication aides.
- Certificate of Need (CON): Streamlining the certificate of need (CON) process.
- Sunset the State's COVID-19 Sick Leave Law which required employers to provide sick leave and other benefits for employees subject to a mandatory or precautionary order of quarantine or isolation due to COVID-19 law because its applicability to new employers is unclear and quarantine requirements have changed.
- Hate Crimes: Includes an increase of $10 million for the next round of the Securing Communities Against Hate Crimes (SCAHC) program, for a total of $35 million. The Executive Budget also includes legislation to expand the list of crimes eligible for prosecution as a hate crime.
- Establish Assisted Living quality reporting and accreditation requirements to be published by the Department.
- Make the Special Needs Assisted Living Residence (SNALR) program
- Creation of an Elder Justice Coordinating Council tasked with developing strategies to defend elders from abuse.
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