New York Plans Another Tax Increase to Support Health Care Special Interests
In a scenario that is all too common in Albany, Governor Kathy Hochul was advocating for measures to control excessive state Medicaid expenditures on home health aides about a year ago. However, she has since shifted her stance as she gears up for her re-election campaign next year.
As a result, Medicaid expenditures are projected to increase by at least 17% in the upcoming budget, and the ranks of home health aides are expanding, making them the largest job sector in New York State.
A recent analysis from the Empire Center based on US Bureau of Labor Statistics data indicates that the home health aide workforce in New York has increased by 57,000 from 2023 to May 2024, reaching a total of 623,000 aides.
This figure significantly surpasses the per capita levels seen in other states and is nearly three times greater than New York’s second-largest job category, retail sales.
This year, Hochul’s preliminary budget proposed a 17% increase in Medicaid spending (some of which is included in other categories); the Legislature is expected to augment that figure because health-care-worker unions, particularly 1199, wield substantial lobbying power.
This increase comes even as state Medicaid spending has already seen double-digit growth alongside a rise in enrollment, despite a declining poverty rate.
Furthermore, New York’s overall healthcare workforce has expanded from 1.15 million workers in 2019 to 1.40 million in 2024.
Initially, Hochul aimed to control the home aide workforce by centralizing hiring through her Consumer Directed Personal Assistance Program. However, this initiative has transformed into a massive unionization effort following an administrative change that facilitated 1199’s recruitment of aides as members, despite the controversy surrounding the organization tasked with managing the centralized hiring.
Additionally, Hochul’s administration enabled New Yorkers without employer-sponsored health benefits to qualify for home-care-aide subsidies under the state Essential Plan, which provided another significant boost for 1199.
It should be noted that unions aren’t the only special interest group pushing for ever-increasing health spending; the state’s hospitals have significant lobbying influence as well, and a multitude of nonprofit insurers and other intermediaries frequently distribute massive payments to private interests following state-sanctioned “restructurings.”
Because Medicaid is a joint state-federal program, New York’s extensive expenditures (along with those of other poorly governed states like California and Illinois) are likely to face scrutiny from Washington. Cuts in payments to New York could reach around $10 billion—something that those currently negotiating the new state budget seem unwilling to acknowledge.
When the time comes for budget cuts, Hochul and her fellow Democrats, who depend on the political backing that unregulated health spending provides, are sure to decry Republicans for their “savagery” and likely resort to a “temporary” increase in various New York taxes to balance the budget.
Voters, consider this your warning.
