$880 Billion Medicaid Cut Sparks Alarm in NY: ‘Devastating’ Blow to Nursing Homes, Families

New York's care system is bracing for impact as Congress debates a staggering $880 billion cut to Medicaid — a move experts say could cripple nursing homes, shutter clinics, and strip millions of vulnerable New Yorkers of essential healthcare.

Medicaid on the Chopping Block

Medicaid — which covers 6.9 million New Yorkers, including 63% of nursing home residents — faces its biggest threat in decades. A GOP-led House plan proposes reducing federal Medicaid funding by $880 billion over 10 years. That leaves states like New York with grim options: cut coverage for up to 2 million people, slash benefits, or raise billions in taxes to keep programs afloat.

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The federal-state insurance program has long supported low-income individuals, elderly residents in long-term care, and people with disabilities. But since the Affordable Care Act expanded eligibility in 2014, Medicaid has also helped gig workers, part-time retail staff, house cleaners, and self-employed contractors afford medical care.

Real People, Real Risk

Take Jorge, a construction worker in White Plains. He earns $35,000, supports two children with asthma, and relies on Medicaid for doctor visits and medication. Without it, he could end up in emergency rooms — a far more expensive route for the system.

Phil, a 58-year-old carpenter in the Adirondacks, finally has preventive healthcare thanks to the ACA. “Whatever you say about Obama, he gave health care to millions of people,” Phil says.

Then there's Jonathan VanScoy, a recovering addict from the Finger Lakes. Medicaid paid for treatment that helped him stay sober and care for his aging mother. “It turned my life around,” he said during a recent protest in Corning.

Politics at Play

The cuts put New York’s seven Republican House members in a bind. Under pressure from party leaders to trim spending, they also face a backlash from constituents who depend on Medicaid. Rep. Mike Lawler (R-Hudson Valley) pledged to protect seniors, children, and the disabled, but emphasized the need for “work requirements” and tighter eligibility rules.

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Still, critics say work requirements are red tape disguised as reform. “They kick sick people off Medicaid and don’t save much money,” said Michael Kinnucan from the liberal Fiscal Policy Institute.

A 2023 KFF study backs that up: nearly two-thirds of Medicaid recipients already work. And 59% of all Medicaid spending goes to the elderly and disabled — not the so-called “able-bodied adults” targeted by reformers.

Fraud, or Fear Tactics?

Republicans like Rep. Nicole Malliotakis (R-Staten Island) argue rampant fraud justifies cuts. She cited audits showing unverified claims and criminal cases involving false Medicaid billing. But watchdogs say the proposed $880 billion in cuts far exceeds any savings from fraud detection.

“If they think they’re going to get $880 billion from waste and fraud, they’re woefully mistaken,” said Manatt healthcare analyst Kevin McAvey.

What’s Next?

Governor Kathy Hochul has yet to lay out a full response but may call a special legislative session if federal funds disappear. Meanwhile, health advocates are sounding alarms, staging protests, and urging Congress to rethink.

“This isn’t just numbers on a spreadsheet,” said Elisabeth Benjamin from the Community Service Society. “It’s millions of lives, jobs, and the future of elder care in New York.”

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