Medicaid On The Chopping Block; Millions of NYers Are Vulnerable But We Can Fight Back

With nearly half the state’s population dependent on Medicaid and the Affordable Care Act for their health coverage, and Federal funds providing 60% of the dollars, millions of New York residents are deeply vulnerable to the schemes now working their way through Congress to cut the Medicaid program.

After reviewing New York’s program and the ideas underway from the Republicans to slash Medicaid, I’ll take a look at how New Yorkers can fight back.

The severe dependency on these Federal public health insurance programs is reflected in the State budget submitted by Governor Hochul to the Legislature in January 2025. The budget estimated that seven million residents of New York are receiving their health coverage through Medicaid, and two million more from other Federal programs like the Essential Plan (an Affordable Care Act program) and Child Health Plus, for a total of 9 million people, including five million people in New York City.

With 47% of the State’s population covered, New York has the highest percentage of residents of any State using these Federally-funded public health insurance programs. (Medicare is not included.)

This budget table shows Federal funds  will be nearly $71 billion of the 124 billion to be spent on Medicaid in NYS in FY’26, nearly 60% of the total spent:

The House of Representatives Resolution adopted February 25, 2025, includes $4½ trillion in tax cuts and  $2 trillion in spending cuts over the next ten years. The Resolution instructs the House Energy and Commerce Committee to pare $880 billion in spending in areas under its jurisdiction; any pretense these cuts wouldn’t include Medicaid was blown up by a Congressional budget office letter to senior Democrats on the budget committees that acknowledged 93% of the $ 880 billion would have to come from Medicaid if Medicare cuts were excluded.

The $880 billion in Medicaid cuts are likely an underestimate; the Congressional resolution included $500 billion in unallocated, unspecified cuts if a full $4½ trillion in tax cuts were to take place. Medicaid would continue to be a major target for cuts in this unallocated $500 billion spending reduction.

Cuts of the magnitude in the House resolution could amount, just doing the math, to 10-12% of the national Medicaid and Affordable Care Act budget of over $700 billion this year. There are also cuts (outside the scope of this article) likely to take place in Food Stamps, housing, social service, veterans, and Federal workforce cuts from hatchet man Elon Musk.

There’s no shortage of ideas for cutting the Medicaid program. They center around slashing the Federal shares of funds in the hundreds of billions and leaving States holding the bag. Forcing Medicaid recipients to work saves close to nothing- $10 billion a year. The reason:  most Medicaid recipients who aren’t disabled, elderly, or children are already working.

Republican leaders in the House have discussed targeting the Medicaid expansion, the Affordable Care Act program that provides health coverage for people up to 138% of the poverty level, estimated at 20 million in the nation. They would accomplish this by eliminating the 90% share of Federal funds that cover the costs of insuring that group.

In New York State, the Kaiser Family Foundation has estimated New York would lose $7 billion in Medicaid funds that covered 2 million people under the expansion program; this would blow a $7 billion hole in the State budget.

Another option under discussion in Congress is to set a limit – a “cap” on Medicaid expenditures per enrollee across the nation, and then restrict growth to the rate of inflation. The Kaiser Family Foundation analyzed this option and, for New York, assumed a 10% cut. If paired with eliminating the Medicaid expansion discussed above, that could cut New York’s Federal funding for Medicaid by 20%. Federal funding in New York consists of nearly $59 billion for regular and expansion Medicaid, and $12 billion for the Essential Plan. Cuts of 20%, or $14 billion in New York’s Medicaid program, seem almost inconceivable. However, those aren’t all the options under discussion in Congress.

Many states, including New York, partially finance their Medicaid programs with funds beyond just State and local taxes. These are primarily assessments and surcharges on hospital revenues or private health insurance premiums. The states then use the money collected as if they were the state’s contribution to the Federal Medicaid program, and draw down Federal funds. In New York, these charges are titled Health Care Reform Act funds and amount to about $6 billion a year. Congress is also talking about capping the use of these funds in major ways, once again with impacts in the billions of dollars in New York.

The New York Essential Plan is a Federally-funded option taken by just three States across the nation. It covers persons between 138% and 250% of the poverty level. New York receives $12 billion a year to pay for health coverage for 1.6 million persons in the State – with no State or local government financial contributions. With only three states in the country taking advantage of this program, the political risk of Congress just getting rid of this program is very high.

The decisions by Congress are still several months away, and the specifics have not been laid out yet. The House Committee on Energy and Power has to come up with its detailed plan, and then it has to get through the full House. The United States Senate will be working independently to pass its own proposals, which now are focused just on spending increases for defense, the immigration crackdown, and tax cuts. Ultimately, both Houses will have to pass a unified bill, possibly in May or June, if they can.

                                     NEW YORKERS CAN FIGHT BACK

Sooner or later, the Republicans will get a budget passed, but here in New York we can make them pay a price and keep the struggle going as long as possible to expose the damage they will cause and help defeat Republican incumbent members of Congress in New York in 2026.

The Governor, the Democratic State Committee, legislators and the public need to press the case loudly about the dangers of Medicaid cuts both across  the State and in the communities represented by Republicans. And maybe help a lot of New Yorkers who voted for Trump think twice about what they did.

According to a New York Times analysis, many Republican members of Congress have high percentages of their constituents enrolled in Medicaid. Amont them is Congressmember Nicole Malliotakis of the 11^th Congressional district in New York, which covers Staten Island and part of Brooklyn. According to the State Health Department Enrollment data, the combined Medicaid and Essential Plan-QHP enrollment for Staten Island is 186,000 (Medicaid) and 44,875 (Essential Plan & QHP), for a total of 232,000, 47% of the population.

The New York 17^th Congressional district, represented by Republican Michael Lawler, includes all of Rockland County, which has a combined Medicaid-Essential plan enrollment of 180,000, more than 50% of Rockland County’s population. Rockland is nearly half the Congressional district and the base of Lawler’s vote, the conservative Orthodox Jewish population there. Although Lawler won his Congressional race by six points in 2024, Vice-President Kamala Harris defeated Donald Trump in that district by a narrow margin.

Congressmember Nick LaLota, the Republican member of the New York 1^st Congressional district, encompassing about half of Suffolk County, won his district by eleven points in 2024. The State Medicaid and Essential Plan data show enrollment in those programs at 507,000 in 2025 , about 33% of the population.

Congresswoman Elise Stefanik of the New York 21^st Congressional district has been confirmed as Trump’s Representative to the United Nations, but she has yet to actually leave her seat in Congress because the Republicans need her vote to pass legislation. She may stay all the way until the spring to assure the Republicans can pass their budget, but there will be a special election to fill the vacancy created by her departure and the fight to protect, or restore, Medicaid, will be critical in that border district with Canada. There are more than a dozen small to mid-size counties in the Congressional district, averaging 25-40% on Medicaid and the Essential Plan. That’s enough dependency on these programs to make their gutting a major issue in that district.

Maximum pressure to halt or limit the Medicaid cuts, in New York and the nation, are the first line of defense for Democrats and the general public. I wouldn’t want to be in the shoes of Governor Hochul and the Legislature when the time comes to deal with a $10 billion, or more, hole in the State’s budget from reductions in Federal funding for the Medicaid program in the coming year, but they need to begin planning now.