Impact of Washington’s Budget Bill on New York’s Health Care: What You Need to Know

The recent federal budget approved by the House will hit New York hard, costing the state billions in health-care funds. State leaders warn that this could lead to a significant drop in enrollment in government-run health plans, affecting hundreds of thousands of New Yorkers. However, the situation might not be as dire as portrayed.

New York’s health-care system benefits from strong funding sources, both public and private. Even with potential losses, state officials have indicated that total funding may still exceed past budget levels. In fact, even if New York loses $7 billion due to the new budget, it could still have more resources than in 2025.

Here’s a closer look at some key changes in the budget that will affect health care in New York:

ACA Tax Credits Excluded for Some Immigrants

The budget expands current rules by excluding more immigrants from receiving Affordable Care Act (ACA) tax credits and enrollment in the state’s Essential Plan. This impacts those who are legally in the U.S. but not yet naturalized, such as new green card holders and certain refugees. By January 1, 2027, around 730,000 of the 1.7 million enrollees in the Essential Plan may lose their coverage, costing the state about $7.6 billion in revenue.

Historically, New York has offered these tax credits based on a 2001 court ruling. The state is still required to provide Medicaid coverage for some of these individuals, expected to cost about $2.7 billion. This could lead to a combined loss of over $10 billion in revenue and increased costs, though the overall net impact on the health care industry might be closer to $5 billion.

Work Requirements for Medicaid

A major move in the budget is the introduction of a work requirement for non-disabled adults on Medicaid. They must show 80 hours of “community engagement” monthly to continue receiving benefits. This could affect 1.2 million people, leading to estimated savings of about $9 billion in Medicaid costs. States like Arkansas have seen similar work requirements drastically cut Medicaid enrollment, hinting that New York could face significant losses as well.

Taxes on Providers

The new budget also restricts so-called provider taxes, which some states use to gain federal funding without contributing their own funds. New York’s current tax on managed care organizations could face scrutiny and estimated losses of $1.6 billion. While other provider taxes are in play, the larger ones have been shielded from immediate regulations.

Federal Penalties for Supporting Undocumented Immigrants

Some states provide health coverage for undocumented immigrants using state funds, but the new federal law will penalize those states by cutting federal Medicaid funding. For New York, this could mean a loss of $924 million, which represents about 1% of its total federal health funding. The state faces a tough choice: either lose vital funding or reduce its coverage for undocumented residents.

Increased Administrative Duties

The budget lays out new administrative requirements for states, including tougher work verification standards. Officials estimate these changes could add approximately $564 million in costs annually. Additional provisions might limit how Medicaid supports transition-related care and abortion services, provoking further debate about the state’s healthcare priorities.

User Reactions and Social Media Trends

Social media reactions reveal a mix of concern and frustration from New Yorkers. Many fear that poorer populations will lose vital health services, while others argue for sustainability and efficiency in the state’s healthcare funding strategy.

Overall, while the changes in the federal budget could create significant challenges, New York’s strong funding base might help cushion some of the impacts. Keeping an eye on how these changes unfold will be essential for understanding their long-term effects on the state’s healthcare landscape.

For additional insights, you can read more about the impacts on the New York State official health department site or explore data from the Centers for Medicare & Medicaid Services.

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