New York State Medicaid Loses $500M from Inadequate Medicare Enrollment Oversight

New York State's Health Department has been criticized for inadequate oversight in transferring Medicare-eligible individuals from Medicaid to Medicare, resulting in approximately $500 million in unnecessary state Medicaid expenditures over the past decade. Young seniors who qualify for Medicare after turning 65 should be enrolled promptly to shift costs from state-funded Medicaid to federally funded Medicare, yet thousands have remained on Medicaid due to oversight failures.

The state comptroller's office issued a follow-up audit highlighting that since 2023, Medicaid has paid an extra $190 million for nearly 18,000 recipients whose claims should have been covered by Medicare. The audit underscores continuing gaps in coordination between the Health Department and local social services, which are responsible for notifying individuals about Medicare eligibility and facilitating timely applications.

Medicare coverage, fully federally funded, generally reduces the fiscal burden on state and local governments by assuming routine healthcare costs for eligible seniors. New York's excess spending occurs amidst looming federal Medicaid funding cuts, which could exacerbate fiscal pressures on the state and lead to reduced coverage or increased state spending.

The Health Department has defended the additional costs as a small portion of overall Medicaid spending but has yet to implement new procedures to improve Medicare enrollment. The changes are critical given projected Medicaid enrollment reductions due to federal policy reforms introducing work requirements and other eligibility restrictions.

This situation highlights broader challenges in Medicaid program administration and cost containment, emphasizing the need for compliance with eligibility requirements and efficient payer/provider transitions to maintain fiscal sustainability in state healthcare programs.