A federal budget bill passed by House Republicans this week is expected to slash funding for New York’s vast Medicaid program.
Congress narrowly passed a budget plan late Tuesday to extend President Donald Trump’s 2017 tax cuts, aiming to secure $4.5 trillion in tax reductions by cutting $2 trillion in federal spending over a decade. The bill directs the Committee on Energy and Commerce to decrease spending by $880 billion, a reduction that won’t be possible without Medicaid taking a major hit, political leaders say.
“The numbers that the House action is looking at are astronomical,” said Ken Raske, president and CEO of the Greater New York Hospital Association, a lobbying group that represents more than 200 hospitals in New York and surrounding states. It’s “inconceivable” to think about how the federal government will achieve those savings without a “material and utterly disruptive effect on the Medicaid payment system,” he said.
The House budget bill does not outline specific policy proposals to reduce Medicaid spending, but the hospital sector and government officials are certain that New York’s health industry will suffer.
Major funding disruptions to the Medicaid program “will force the closure of a number of New York hospitals,” Raske said, adding that safety-net hospitals that serve a high proportion of low-income patients and people of color face serious risks.
New York’s Medicaid program is one of the nation’s largest; its budget surpassed $100 billion last year, more than half of which came from the federal government, according to the state comptroller’s office. Nearly 7 million New Yorkers – representing almost 30% of the state’s total population – are covered by Medicaid or the Children’s Health Insurance Program, according to a recent estimate from the San Francisco-based health policy think tank KFF.
Medicaid provides essential health coverage for low-income people and families, pregnant women, older New Yorkers and people with disabilities. New York has expanded its program under the Affordable Care Act to ensure people who make up to 138% of the federal poverty limit can go to the doctor and access necessary medical procedures. The income threshold is higher for some groups, including pregnant women and children.
The looming cuts could kick some people off the program, according to Gov. Kathy Hochul.
“House Republicans just voted to rip health care away from up to 1.8 million New Yorkers – all to bankroll giveaways for billionaires,” she said late Tuesday, referring to those who could get kicked off Medicaid or Child Health Plus, an insurance program for kids in low-income households.
Raske declined to speculate about the Medicaid-funded programs that could be first on the chopping block, but said there are a range of policies that lawmakers could pursue. Lawmakers may impose Medicaid work requirements, mandating enrollees to obtain a job to qualify for coverage. They could also reduce the percentage of state Medicaid funds that the federal government will match, cutting into payments for hospitals, Raske said.
The budget bill is the first step to implementing federal funding cuts, which is subject to a vote in both the House and the Senate and could likely extend through the spring or summer, said Jon Cooper, senior vice president of federal government affairs at GNYHA.
Trump told Fox News last week that extending tax cuts would not eat away at social services programs, including Medicare and Medicaid.
Raske said he hopes the president is right, but added “I can’t see how it could be, given the size of the cut.”
