New York’s spending is multiplying — but maybe not adding up.
The state is now spending more on its massive Medicaid program than it does on K-12 schools — as it already pays more per person than anywhere else in the country, a shocking new analysis showed.
New York taxpayers paid an eye-watering $39.4 billion for the Medicaid program in the 2025-26 fiscal year — 26.5% of the entire state budget — and more than the $37 billion it dished out for education, according to a new report from state Comptroller Tom DiNapoli.
The soaring spending comes as the federal government probes Gov. Kathy Hochul’s administration and its Medicaid program for possible waste, fraud and abuse.
“When Medicaid outranks math, the state’s fiscal diagnosis isn’t complicated,” Dr. Mehmet Oz, administrator of the US Centers for Medicare & Medicaid Services, told The Post. “Every tough decision New York makes to clean up Medicaid ensures that education is not crowded out.”
The Trump administration most recently set its sights on numerous adult care centers for seniors located in New York City over possible fraud.
Medicaid is the national health insurance program for the needy, with costs shared by the federal, state and local governments.
New York already spends more per resident on Medicaid than any state in the US — and it pays more on education per student than anywhere else.
State spending on Medicaid has more than doubled over the last decade.
“In recent years, all [state] agency Medicaid spending has overtaken spending on School Aid,” DiNapoli’s report said, analyzing the effects of the state’s record-high $269 billion budget for 2026-27.
Combined spending on Medicaid and education accounts for more than half the current state budget.
DiNapoli’s analysis, citing Hochul’s budget division projections, said state Medicaid will soar in three years to $53.3 billion — 29% of state spending in three years — while School Aid spending will jump to $43.7 billion, or 23.8% — a nearly $10 billion gap.
“Spending on Medicaid is too high. It’s a free for all. There’s no accountability. They don’t care about the results,” said Bill Hammond, a fellow with the Empire Center for Public Policy who monitors New York’s health care policy.
Every sector of the influential health care industry receives Medicaid dollars — hospitals, nursing homes, medical clinics, drug manufacturers and home care services, Hammond said.
“It’s not about serving the public interest. It’s about serving special interests,” he said.
He said the foundation of the Medicaid program provides worthy services to needy patients including people with disabilities.
But in many cases New York overspends and wastes money, he said.
Adult care centers for elderly residents have proliferated and costs have skyrocketed, with prosecutors bringing cases against operators offering bribes for enrollment, he added.
Albany’s generosity also comes at a hefty cost, with Hammond saying a majority of Medicaid recipients in New York have incomes above the poverty level.
DiNapoli said Medicaid spending is projected to increase by $5 billion to help medical facilities handle an influx of patients showing up in emergency rooms because federal cutbacks knocked them off the health insurance rolls.
Medicaid enrollment is projected to jump to 7.2 million, from 6.6 million, as non-citizens get booted off another state-run health insurance called the Essential Plan.
Hochul’s budget office reports that Medicaid spending increases are driven by minimum wage hikes for health care workers, rising medical and drug costs, higher reimbursement rates for hospitals and nursing homes, and continued growth in aging and other “high-utilization populations,” the analysis noted.
But DiNapoli also pointed out that the number of New York hospitals identified as “financially distressed” and eligible for emergency subsidies has also skyrocketed.
Some 75 of the state’s 261 hospitals, or 28.7%, were labeled financially distressed — a 200% from a decade ago. The surge in financially faltering hospitals triggered a 700% increase in federal and state aid to those facilities.
The just enacted state budget includes a $500 million in “one-time” assistance to distressed hospitals.
The increased Medicaid spending above the state spending cap coupled with a drop in health-related tax revenues will “require the State to make choices about the sustainability of the current trajectory of Medicaid spending,” the comptroller’s analysis said.