A surge in Medicaid spending and a $1.5 billion bailout for New York City are raising red flags for State Sen. Tom O’Mara, who says Albany still isn’t serious about fighting fraud and waste.
In his weekly column for Feb. 23, O’Mara argues that state leaders continue to focus on spending more taxpayer dollars while doing too little to control costs or protect taxpayers.
O’Mara points to what he calls “Exhibit A” — a plan to send another $1.5 billion in state funds to help New York City close a multi-billion-dollar budget deficit. He says the bailout comes with no strings attached and no new accountability measures.
He also criticizes continued debate around Gov. Kathy Hochul’s proposed 2026-27 Executive Budget, especially spending tied to the state’s clean energy agenda and Medicaid program.
O’Mara has long opposed the state’s Climate Leadership and Community Protection Act, arguing it isn’t affordable, feasible or reliable. But this week, he zeroes in on Medicaid.
At a recent joint Senate-Assembly budget hearing, Bill Hammond of the Empire Center for Public Policy offered blunt testimony about the program’s growth.
“For the fourth year in a row, the governor has used the word ‘unsustainable’ to describe the growth rate of her own Medicaid budget,” Hammond wrote. “It’s hard to dispute that assessment.”
Hammond said the state share of Medicaid has increased by 60 percent since 2022, or roughly five times the inflation rate. He said that growth equals an additional $16 billion per year on top of what was already the highest per capita Medicaid spending in the nation. With federal aid included, he said, total Medicaid spending has risen by $28 billion annually.
The governor’s proposal would add another $4.3 billion to the state share, a 10 percent increase that Hammond said runs nearly four times the rate of inflation.
“This raises the question of what those additional tens of billions are buying for the people of New York,” Hammond wrote.
He urged state leaders to look for ways to constrain costs and deliver better value instead of “simply pouring more tax dollars into an already well-funded health care industry.”
O’Mara says Medicaid now costs about $120 billion a year, nearly half the state budget. He argues that efforts to rein in spending and root out fraud have taken a back seat.
In early January, the Senate Republican Conference called for an independent audit of Medicaid spending. In a Jan. 2 letter to Hochul, Republicans wrote, “Given that New York administers comparable programs involving billions of taxpayer dollars, it is imperative that proactive measures be taken to ensure similar abuses are not occurring here.”
O’Mara points to several recent fraud cases and findings, including $68 million in Medicaid fraud by a Brooklyn adult daycare operator uncovered by the U.S. Department of Justice last August, more than $2.6 billion in improper Medicaid premium payments for people who do not live in New York, $13 million in fraud tied to medical transportation, and $7 million in fraudulent billing.
During his testimony, Hammond said New York ranks near the bottom nationally in the number of Medicaid investigations per billion dollars spent.
When O’Mara asked what more the state should do, Hammond answered plainly: “We should be doing more investigations.”
O’Mara says an independent audit should rank among the governor’s top priorities and happen without delay.
FingerLakes1.com is the region’s leading all-digital news publication. The company was founded in 1998 and has been keeping residents informed for more than two decades. Have a lead? Send it to [email protected].