New York could lose a billion dollars or more under a Republican proposal that would penalize states for providing health insurance to undocumented immigrants.
The budget bill House Republicans introduced Sunday to cut federal spending by approximately $900 billion, including $715 billion in Medicaid funding, contains a provision that would reduce Medicaid reimbursement rates to states like New York that have extended coverage to undocumented residents who are not eligible for federally-backed insurance programs.
While states are already prohibited from using federal dollars to insure undocumented immigrants, the measure being considered would cut funds to states using their own money to pay for it. New York launched a program to do just that last year for undocumented individuals ages 65 and older.
“The intent here is to use the threat of taking federal money away to force states to drop this coverage,” said Bill Hammond, senior health policy fellow at the Empire Center, a conservative think tank based in Albany.
The state’s version of the federal Children’s Health Insurance Program, known as Child Health Plus, which covers kids in low-income families who don’t qualify for Medicaid, could also trigger the penalty, according to Michael Kinnucan, a senior health policy advisor at the left-leaning watchdog group Fiscal Policy Institute.
House Speaker Michael Johnson faces an uphill battle to secure enough votes to pass the reconciliation bill, which was considered in the _House’s energy and commerce committee_ on Tuesday. Republicans have been divided over the spending plan, with representatives in swing districts concerned that Medicaid cuts and other proposals, like a cap on state and local tax deductions, could hurt their chances at the ballot box, while hardline spending hawks push for deeper cuts.
“Undoubtedly, Democrats will use this as an opportunity to engage in fear-mongering and misrepresent our bill as an attack on Medicaid. In reality, it preserves and strengthens Medicaid for children, mothers, people with disabilities and the elderly — for whom the program was designed,” wrote Energy and Commerce Committee Chair Brett Guthrie, a Kentucky Republican, in an op-ed in the Wall Street Journal on Sunday.
The legislation would reduce federal reimbursement rates for the segment of Medicaid recipients covered under the Affordable Care Act’s expansion of the program. Hammond and Kinnucan each estimated the cuts could cost the state between $1 and $2 billion a year based on recent enrollment and reimbursement rates.
“While we won’t speculate about the specific impacts of a draft unfinished proposal, Republicans in Washington have made it clear that any bill they pass will make sweeping cuts to federal programs like Medicaid that millions of New Yorkers rely on,” said Nicolette Simmonds, a spokeswoman for Hochul. “It’s impossible for any individual state to backfill the massive cuts being proposed in Congress, but Governor Hochul is committed to using litigation and other tools to protect New Yorkers.”
The latest threat to federal health funding came days after Albany lawmakers passed a $254 billion state budget that increases Medicaid spending by billions of dollars.
The proposal would force Gov. Kathy Hochul to decide whether to cut coverage for undocumented immigrants to preserve the full slice of the federal match or continue the coverage and supplement the lost funding from state coffers. Hospital leaders and fiscal watchdogs warned that if the administration chooses to revoke health insurance for low-income undocumented residents, tens of thousands of New Yorkers could lose insurance. If the program includes Children’s Health Plus, as Kinnucan believes it will, a majority of those residents will be kids, he said.
“It’s a really disturbing proposal,” he said. “They were talking about doing something about undocumented immigrant health coverage but I’m really stunned by the harshness and overreach here.”
The proposal, if passed, would likely lead to legal challenges based on a 2012 Supreme Court ruling that threatening to withhold federal funding from states that didn’t comply with the Affordable Care Act’s Medicaid expansion was unconstitutional, Kinnucan said.
Immigrants losing coverage would mean more people seeking care in the emergency room, which would strain state and local budgets and push more struggling safety-net hospitals toward the brink, said Kenneth Raske, president and CEO of the Greater New York Hospital Association, an influential trade group representing northeast hospitals.
“In the end, the policy of the energy and commerce people cannot stop people from getting sick. They could stop paying for it, but somebody else will have to pick up the tab,” he said.
