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State needs to supply city with more Medicaid funds

An open letter to Gov. David Paterson, state Senate Speaker Sheldon Silver and state Senate Majority Leader Malcolm Smith:

As all levels of government continue to grapple with the consequences of the worst economic downturn in over half a century, we are shocked by your announcement that the state plans to withhold a larger share of the total state Federal Medical Assistance Percentages allocation than was originally anticipated.

Of the $11.1 billion in FMAP state funding, only $2.7 billion would be allocated to localities. Of this, the city would receive no more than $1.9 billion, less than the $2.1 billion in Medicaid financing expected over the next two years based on existing allocation formulas.

The outlined proposal undermines the state’s 2006 agreement that local governments would only be liable for up to 3 percent of the annual growth in Medicaid costs, with the state picking up the amount beyond that. The 3 percent cap provides vital Medicaid relief, shifting the burden for additional costs back to the state, where decisions regarding Medicaid policy and parameters are determined.

But under the announcement, the state is reneging on the commitment to localities, forcing them to share a greater burden for growing Medicaid costs.

We understand the need at all levels of government to make critical adjustments in spending. It is of vital importance that these be made in a way that ensures core services and encourages the rebuilding of the economy.

The announcement threatens to take $200 million or more in badly needed federal stimulus aid from the city at a time when we are struggling to ensure that vital services are protected. For that reason, we urge you to reconsider the allocation of FMAP funding under the federal stimulus package to honor the state’s commitment to cap growing Medicaid costs.

Christine Quinn, Council speaker, members Helen Sears,

David Weprin,

Leroy Comrie,

Melissa Mark−Viverito,

Joel Rivera,

Maria del Carmen Arroyo,

Sara Gonzalez,

Inez Dickens,

Thomas White Jr.,

Dan Garodnick,

James Oddo,

Vincent Ignizio,

Melinda Katz and

Larry B. Seabrook

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