Health care providers on Long Island brace for large cuts in federal Medicaid funding

WASHINGTON — Long Island health care providers say they are bracing for the financial impact of anticipated cuts to Medicaid as the Republican majority in Congress works on sweeping legislation to make 2017 tax cuts permanent.

A cut to the federal share of Medicaid funding to New York would have a ripple effect across Long Island, where some 680,000 Nassau and Suffolk county residents with limited income — or more than a fifth of Long Island’s population — rely on it to help cover medical costs, according to New York hospital and physician association leaders.

House Republicans last month passed a budget resolution to extend those tax cuts, which expire at the end of this year, and to offset the cost cuts they instructed a House committee with jurisdiction over Medicaid to cut spending by $880 billion over the next decade.

Now the House and Senate Republicans who passed a resolution that did not cut nearly as much spending as the House are negotiating a final joint resolution that will allow them to use a reconciliation bill to avoid a Democratic filibuster in the Senate.

The nonpartisan Congressional Budget Office said in an analysis that meeting the goal for identifying spending cuts would require lawmakers to make major changes to Medicaid.

But Rep. Brett Guthrie (R-Ky.), chair of the House committee charged with finding $880 billion in spending cuts, said on Tuesday that changes to Medicaid can be made "to make sure people have the benefits they’ve been promised."

Medicaid is a joint federal and state program that helps people with limited income and resources pay for medical costs, including medical and nursing home care, and personal care services. Recipients usually don't pay for their care, except for small co-payments.

New York State has one of the most generous programs — each state sets eligibility requirements and benefits — which is mostly paid for by the federal government.

The federal government paid $57.1 billion for Medicaid in New York State in fiscal year 2024, with the state putting up $35.9 billion and localities such as New York City paying $8.5 billion, according to the New York's Office of State Comptroller.

Medicaid likely will face spending cuts, Wendy Darwell, president and CEO of the Suburban Hospital Alliance of New York State, which includes Long Island hospitals, told Newsday in a phone interview.

"Although we don’t have an actual plan for how they would execute those cuts yet, we do know, just from a sheer numerical perspective, that there would need to be cuts to Medicaid in order for them to achieve the savings that they're looking to extend the tax cuts," Darwell said.

The federal government has flexibility in how it could reduce payments to the federal-state Medicaid program in New York, she said, including lowering its 50% contribution to the state, capping the federal contributions at a lower rate or making other adjustments.

"We do have an expansive Medicaid program in the state of New York, and so we really maximize the federal funding that's available. That puts New York very much at risk for any of these cuts, should they happen," she told Newsday.

Dr. Jerome Cohen, president of the Medical Society of the State of New York, which represents physicians, told Newsday in a phone interview that only a small percentage of New York and Long Island doctors serve Medicaid patients.

"But the physician offices that do take Medicaid are very much on the edge," Cohen said, adding that Medicaid cuts to the physician offices and clinics that serve those patients "would be absolutely devastating, because they are so close on the margin of staying in business."

Cohen added, "Our most important focus is what it means for the patients who are the working poor. There are plenty of working poor on Long Island."

Steven Kent, chief economist for the Long Island Association and a professor of economics at Molloy University, described a multiplier effect resulting from cuts to federal funding for Medicaid in New York.

"If the federal government cuts back the funding, then my sense would be that the state and local [governments] would have to step in," he said.

And local and state government might have to pull back spending on other things such as infrastructure, education and development to pay for the federal government reducing their Medicaid funding to New York.

"It has a ripple effect, or percolates through the whole economy, when we see these types of reductions in spending," Kent said. "And either it would reduce the spending for Medicaid, or you would have to raise taxes to pay for the Medicaid that the federal government is not helping with."