Almost half a million people on New York’s Essential Plan could lose healthcare this week.
More are likely to be cut off from Medicaid because of stricter work requirements starting in January. Both are the result of changes from the One Big Beautiful Bill Act, signed into law last summer.
Some healthcare experts are warning that dozens of hospitals in New York are at risk of closing
Steve Kelley, has been the CEO of Ellenville Regional Hospital for over 20 years, and recently became chairman of the board of the Healthcare Association of New York State. He says Ellenville Regional has weathered many financial storms, including during and after COVID. But, he says he is worried about the looming effects of Medicaid cuts on rural hospitals like his.
“We have saved some money, so we're in a position where we hope that we can weather a storm. A lot of our colleagues have not been able to do that. They've had crises that have eaten up their cash reserves if they had any to begin with. There’s just not a lot of margin for error,” Kelley said.
Michael Kinnucan coauthored a Fiscal Policy Institute report published last year that explained dozens of hospitals across New York – especially in poor rural and urban areas – are likely to lose money as the public loses access to healthcare.
“When people lose health insurance, they don't stop going to the emergency room when they get really hurt, right? It's just that they no longer have a way to pay for treatment. There's a really serious concern from hospitals' perspective that they'll be providing care they won't be paid for. And that could be a financial burden on them,” Kinnucan said.
Starting this month, almost half a million New Yorkers are likely to lose state healthcare known as the Essential Plan as a result of federal funding cuts included in the One Big Beautiful Bill or H.R. 1.
The New York State Department of Health began sending out notices to almost half a million Essential Plan enrollees in April. DOH says people who will be most affected this July are Deferred Action for Childhood Arrivals recipient (DACA) and those making over 200% of the federal poverty level, which is about $31,000 to $66,000.
A DOH spokesperson told WAMC the department is “committed to supporting New Yorkers who have lost their Essential Plan coverage as a result of the impact of federal H.R. 1 legislation,” and is working to connect those losing care to alternatives like a Qualified Health Plan through August 30.
Starting in January, work requirement changes included in H.R.1 could cause hundreds of thousands more on Medicaid to lose their care.
Reports from the Fiscal Policy Institute and Public Citizen estimated that between 45 and 70 hospitals in New York will be at risk of closing. The studies focused on hospitals with narrow or negative profit margins that received significant Medicaid or other government funding.
The Congressional Budget Office has estimated almost a trillion dollars in cuts to Medicaid over the next 10 years – the largest Medicaid cuts in history. The CBO estimates the sweeping budget law would increase the number of uninsured people by over 1 million in 2026 and 10 million by 2034.
Eileen O’Grady, author of the Public Citizen report published in March, said healthcare cuts from H.R. 1 will have widespread impacts on people who are low-income, people who are disabled, and who rely on Medicaid – also affecting hospitals’ bottom lines.
“It might mean having to lay off staff, which means that there are fewer clinicians to spend time with patients and to provide high-quality care. It might mean cutting services, less profitable services, especially like labor and delivery or pediatrics. It might mean longer wait times in emergency rooms, and in the worst-case scenario, when a hospital closes, it means that people in that community have to travel further for care. It also means that nearby hospitals will be even more burdened with more patients and fewer resources,” O’Grady said.
Lara Kassell, coalition coordinator at Medicaid Matters, said rural hospitals will be among those hardest hit. She said rural hospitals are often also safety-net hospitals that serve anyone in the community.
“A lot of them have other services adjacent to the hospital or associated with the hospital, such as behavioral health centers, dental services, and other services that they've chosen to provide as the community provider. Those types of services are very often at risk when there's less money to go around,” Kassell said.
H.R. 1 includes $50 billion to support rural healthcare. Compared to the scale of Medicaid cuts, though, O’Grady called it a “Band-aid on a bullet wound.”
Almost a third of rural hospitals in New York are at immediate risk of closing, according to the Center for Healthcare Quality and Payment Reform.
But some see cutting Medicaid as necessary downsizing that could ultimately be a benefit to healthcare.
Republican Hudson Valley Congressman Mike Lawler signed the One Big Beautiful Bill last summer and doubled down on his support when President Donald Trump visited Rockland County recently.
“Don't let anyone lie to you. We didn't gut Medicaid and give tax cuts to billionaires. We strengthened Medicaid by disqualifying illegal immigrants and others who were scamming the system, and by requiring able-bodied adults without dependent children to work, volunteer, or go to school 20 hours a week to keep their eligibility,” Lawler said to great applause.
Bill Hammond, a senior fellow at the right-leaning thinktank Empire Center, is concerned said that it’s hard to predict which hospitals will be affected by these changes.
Overall, he’s skeptical that some hospitals reportedly at risk like Albany Medical Center will actually close.
“New York's hospital systems, for years, as long as I've been paying attention, have had a lot of hospitals who report negative margins in a lot of years. So again, that's not new, and it's not something that's driven entirely by Medicaid. It's driven by larger picture trends in the healthcare industry,” Hammond said.
Hammond said reports from the Fiscal Policy Institute and Public Citizen warning of closing hospitals are meant to get the attention of people who don’t have Medicaid.
CEO Kelley agreed it’s hard to predict how it will all play out.
“I think that the strong hospitals will look for cost-cutting mitigations to try and be less expensive. So they'll be able to live within the smaller means. I think weaker ones, are going to struggle more,” Kelley said.
Dr Pablo Sadler, a psychiatrist who works in Rockland County with the Committee to Protect Healthcare, said this won’t just impact people on Medicaid.
“There might be some misunderstanding by people that if I don't get Medicaid, that [it] doesn't matter, because I have my private insurance,” Salder said. “So why would I care, except for basic solidarity with people around me, [since] my healthcare won't be affected. That’s not the case. Everyone is going to be affected.”
