Perhaps the biggest fiscal challenge facing newly‐elected Governor Andrew Cuomo is controlling Medicaid spending in New York State. Medicaid is one of the largest items in the State budget, and because New York requires a sizeable local share, Medicaid is also a significant burden on local governments.

New York is a big spender overall, but also on a per capita and per enrollee basis. New York’s Medicaid program costs $50 billion annually and average monthly enrollment during 2009 was 4.4 million people. Nationally New York has the fourth highest percentage of the population enrolled in Medicaid; in 2007, fully 26 percent of New Yorkers were enrolled in Medicaid, lower only than California, the District of Columbia, and Maine. Approximately 14 percent of all Medicaid spending in the nation occurs in New York State.

New York’s program is big not just because it is a populous state or it covers a lot of people. Spending per enrollee and per capita are significantly higher than in most other states. In federal fiscal year 2007, New York spent approximately $8,450 per enrollee, the second highest nationally, behind Rhode Island. On a per capita basis New York’s Medicaid spending was the nation’s highest at $2,283, more than twice the national average ($1,026).

Facing State budget gaps that are expected to grow from $9 billion to $17 billion in two years, New York’s leaders will need to restructure this critical program.