New York's health care sector, from labor unions to industry leaders, is making a concerted push this month to boost Medicaid spending in the yet-to-be-completed state budget. 

They argue the COVID-19 pandemic has set back the health care workforce in New York and scrambled the finances for hospitals statewide. But budget watchdogs are skeptical, warning state officials should carefully weigh spending in a program that remains one of the costliest in the country and the most expensive budget item each year. 

Lawmakers, too, are worried about individual Medicaid recipients as federal pandemic aid dries up that enabled more people to join the program for lower income residents. 

At issue is Gov. Kathy Hochul's plan to increase the reimbursement rate in the program. Ken Raske of the Greater New York Hospital Association argue the increase — a 5% hike — is not nearly enough to cover the soaring costs for hospitals. 

Without an increase similar to what lawmakers are proposing, the consequences could be dire, Raske warns. 

"We’re going to have hospital after hospital closing in the next year," he said. "That’s what’s going to happen."

Hospitals, from those in rural settings and in urban communities, have warned for months the state needs to step in and provide more assistance in order to avoid any erosion in patient care. 

"We have lost staff that were on the front lines guarding the public health three years ago," Raske said. "But now because of turnover and burnout, quite frankly, we have a problem in getting new people to replace them."

Staff shortages have also alarmed health care workers like Diana Newball, a pharamcy technician at NYU Langone Medical Center.  

"Hospitals, they are on life support, the large majority of them," she said. "After the pandemic, we lost so many workers, so many employees. Some quit and leave, others unfortunately didn’t make it. So, we have to get back on track."

New York's Medicaid program is second in size only to California. Bill Hammond, a health care policy expert at the Empire Center, testified to lawmakers earlier this year and cautioned against spending more in order to aid workforce recoveries in the hospital system as hiring has varied statewide. 

"Lawmakers should be particularly cautious about using Medicaid to solve real or perceived workforce shortages in parts of the health-care industry – especially in areas where Medicaid is not the dominant payor," he wrote in budget testimony this year. "While some providers are struggling to recover from pandemic-related workforce losses, others have fully bounced back."

Still, lawmakers have raised concerns with the potential of more people losing Medicaid coverage in the coming months as federal support for an expansion ends. 

"Because of the changes happening elsewhere, it could have a major impact," said state Sen. John Mannion. "It’s essential to do it now, we know that if things are going to try to happen outside of the budget, because there’s a fiscal attachment, it’s best to do it now."

But Patrick Orecki, of the watchdog group Citizens Budget Commission, says New York needs to keep a tight monitor over Medicaid spending as many recipients will likely be able to land on other plans. 

"We know that delivery has changed during the pandemic and over the years prior, so having a long-term version is really important," he said. 

Medicaid is not one large monolith, too, but a series of programs meant to provide a variety of health care needs, from funding safety net programs to long-term support for patients. 

"Long-term care is growing at a different rate than other services are," Orecki said. "The state really needs to look at where the growth is, where the long-term costs are, to make sure that it stays on budget."