As state budget negotiations continue, there are growing calls for help across the health care spectrum amid concerns over the impact of federal Medicaid cuts.
Gov. Kathy Hochul and state lawmakers must carefully consider where to provide assistance to buffer those cuts, after months of reminding New Yorkers they won’t be able to cover everything — and encouraging them to blame Republicans who voted for the 2025 federal reconciliation law.
Stephen Hanse, president and CEO of the New York State Health Facilities Association, said the state’s struggling nursing homes should be top of mind as leaders decide where to provide relief.
“We really need to look at the more than 15 years of disinvestment in nursing homes,” he said. “As nursing home beds close, we’re seeing backups in hospitals, we’re seeing longer wait times. It’s really rippling across the health care continuum, so we need a solid investment in nursing homes in this budget.”
Hanse hopes some of that funding could come from more than $2 billion Hochul set aside in her executive budget as a contingency plan, in case the state did not receive a federal waiver to preserve coverage for 1.3 million New Yorkers enrolled in the Essential Plan who were at risk due to federal changes.
However, he is competing to be heard alongside hospitals, which are also struggling, and state Sen. Gustavo Rivera, chair of the Senate Health Committee, who wants some of that funding to cover an additional 450,000 New Yorkers still expected to lose coverage in July.
Rivera and Assembly Health Committee Chair Amy Paulin have introduced legislation to ensure no one affected by the Essential Plan changes loses access to health care. The proposal has become part of budget negotiations.
“The governor has already appropriated $2.4 billion for the purposes of covering the entire thing,” Rivera said. “We can actually do it. It falls within the boundaries of the budget the governor has already proposed,” he told Capital Tonight.
Despite earlier fears, Hochul and state leaders have said they expect only about 150,000 people will ultimately be left without coverage in July.
“Of the 450,000 who are affected by the notifications we are required by law to give out, we think about 300,000 will still be covered,” Hochul said Saturday. “They’ll either be covered by their employer as they were before, or they will be able to purchase new health care.”
Hochul’s budget director, Blake Washington, acknowledged the proposal last week and expressed a willingness to help those still at risk of losing coverage, while also pointing to fiscal constraints.
“It’s just fitting it into a financial plan with many competing interests. Medicaid in New York has grown at a pretty steady clip,” he said.
Beyond those major issues, there are also smaller health care disputes in play.
The state Senate included legislation to prevent drug manufacturers, pharmacy benefit managers and other third parties from placing limits on providers participating in the 340B discounted drug program.
The measure is intended to protect safety-net hospitals and clinics from so-called carve-outs that can restrict eligibility and, some argue, prevent providers from receiving the discounts the program is meant to deliver.
While the proposal has been praised by many Democratic lawmakers and safety-net providers, it has drawn criticism from fiscal watchdogs, including Bill Hammond, senior fellow for health policy at the Empire Center.
Hammond told Spectrum News 1 that legitimate safety-net hospitals should not be excluded from the program, but said expanding it without tighter oversight could allow funds to flow with too few restrictions.
“Most of the money, we don’t know how much, but the vast majority is not going to those clinics. It’s going to hospitals, including ones that technically qualify as safety-net hospitals but aren’t in financial distress,” he said.
Hammond said he supports a counterproposal to study how the program is being used.
“Let’s study what is going on with this program,” he said. “How much money is it generating? Who is getting it, and how are they spending it? Minnesota did a study, and I think they found that 98% of it was going to hospitals.”