A new analysis suggests that federal funding cuts to New York State will reduce the state’s Medicaid budget by $63 billion and the number of Medicaid beneficiaries by as many as 750,000 over the next decade.
These estimates of Medicaid budget cuts and enrollment declines in New York State are among the largest in the nation. According to a recent report by the non-profit research organization RAND Corporation, the cumulative decrease in New York State’s Medicaid budget between 2025 and 2034 is estimated to reach $62.612 billion due to the Big and Beautiful Tax Cuts Act (OBBBA, also known as the “Big and Beautiful Act”) signed by President Donald Trump last year. Specifically, the number of Medicaid enrollees in New York State is projected to decrease by a total of 744,600 during this period.
Specifically, the analysis analyzed that 595,900 enrollers will be lost due to enhanced work requirements, 133,100 due to eligibility review, and 6,500 due to restrictions on eligibility based on immigration status. New York’s enrollment decline is also the hardest hit in the nation, along with California (1,889,000).
In addition to these budget cuts, the Trump administration is also pressuring New York state’s Medicaid policies from all sides. Mehmet Oz, Commissioner of the Centers for Medicare and Medicaid (CMS), claimed on the 3rd that “widespread abuse and fraud is occurring in New York’s Medicaid system” and demanded that the state submit a plan for improvement within 30 days.
The New York Post also reported that the federal Department of Justice plans to soon file a lawsuit against the state for allegedly favoring certain companies during the bidding process for the revamped Medicaid Provider Designation Program (CDPAP). Currently, the state is asking CMS to allow it to use existing federal funds held in a trust fund to cover the funding shortfall in the public health insurance “Essential Plan” caused by the implementation of the Open Benefits and Benefits Act (OBBBBA).
The Essential Plan enrolls 1.7 million New Yorkers with incomes below 250% of the federal poverty level. The OBBBA law has made it difficult to secure federal subsidies, putting approximately 450,000 enrollers at risk of losing eligibility. Some are raising concerns that multiple investigations into New York’s Medicaid system could negatively impact the federal government’s decision to maintain the Essential Plan.