News Release

Potential Medicaid Cuts in New York State Budget


New York Focus has reported that New York Gov. Kathy Hochul proposed major Medicaid cuts to this year’s state budget that would impact the state’s Health Homes program. The suggested cuts would take $125 million out of Health Homes––a change that would “end the program as it’s currently functioning.” 

     Fawcett is a freelance journalist who has done criminal justice reporting for New York Focus

Fawcett told the Institute for Public Accuracy that Health Homes is a care management program that serves around 170,000 New Yorkers with complex health conditions and mental health needs, including 30,000 children. Fawcett said: “Health Homes came up in budget hearing earlier this budget season, but hadn’t gotten a lot of attention. I started looking into this program, which is more than a decade old. 

“Medicaid is a huge point of contention this budget season. Gov. Hochul has talked about the spiraling costs of Medicaid, and has proposed $1 billion in cuts. That is a key source of tension between Hochul and the [State] Senate and Assembly, which had proposed significant increases to Medicaid and no cuts [in their respective] one-house budgets. Hammering out these issues around Medicaid remains a key obstacle right now. 

“Health Homes is a small slice of the pie. Its allocation has been historically in the hundreds of millions [of dollars]. It is one of the programs that would be hit by the cuts… This program has been cut down in the past. A couple of years ago, its appropriation was about 500 million. It has seen some cuts in previous years, and that’s been a real source of frustration for providers. This year, it felt like a different caliber. They weren’t expecting this.”

Health Homes helps connect families to services, including helping them maintain Medicaid eligibility and filling out complicated paperwork. Fawcett cited multiple studies that have linked the program to reductions in the number of emergency department visits and hospitalizations as well as increases in the use of outpatient treatment. “Providers are worried that if [Health Homes] is stripped down, [we] could see increases in hospitalizations and emergency room visits. For [providers] who work with children, [we could see] increases in foster care cases and kids ending up in psychiatric centers.

“The [State] Senate and Assembly have proposed multibillion-dollar increases to Medicaid, and are hoping to use an accounting trick––a loophole that California has also used––to tax and then repay health insurers, which would theoretically get them billions of extra dollars from the federal government to fund Medicaid. It remains to be seen whether that will all come together. There are conversations between the legislature and Hochul, [as well as] between New York and the federal government. It’s an open question whether that extra revenue will come through. Hochul seems open to the trick. For Democratic lawmakers who don’t want to see any Medicaid cuts, [this is] a key point with consequences for what the budget ends up looking like.”