NEW YORK (BLOOMBERG) — New York’s Medicaid spending is projected to rise to nearly $134 billion in the current fiscal year, about $45 billion more than the state spent five years ago, driven by an aging population, rising medical costs, and growing enrollment in home health care.
Despite a 50% increase in the federal-state program supporting healthcare for the poor and elderly, New York expects to hold Medicaid spending growth to just 1% and 1.5% for fiscal years 2028 and 2029 respectively, according to the state’s Mid-Year Financial Plan Update released Friday.
Tim Ruffinen, a spokesman for the state’s Division of Budget, declined to comment.
New York ranks first among US states in Medicaid spending per capita, and the program eats up almost half of the state’s roughly $282 billion budget. Medicaid costs are shared by the federal government, the state, counties and New York City.
In addition to an aging population, increased reimbursement rates for hospitals and nursing homes, as well as higher drug costs, are driving up spending, the state said.
President Donald Trump’s budget bill in 2025 included sweeping cuts to Medicaid safety-net programs like food stamps.
In 2030, federal spending for New York’s Medicaid program is expected to decline to about $69 billion from about $76 billion the prior year.
Enrollment in the state’s managed long-term care program for seniors and individuals dually enrolled in Medicaid and Medicare comprise about 60% of Medicaid spending. By 2030, New Yorkers aged 65 and older are projected to comprise 21% of the state’s population, up from 13% in 2010, putting significant pressure on the state budget, the Mid-Year update said.
