News Summary
New York has reached a $98 billion expenditure in its Medicaid program, raising sustainability concerns. With over 6.9 million residents enrolled, state officials warn that costs are escalating rapidly, driven by increased coverage and systemic inefficiencies. Proposed budget increases and potential cuts to federal funding threaten to impact countless residents reliant on Medicaid. Ongoing developments spark discussions about the future of managed care systems and necessary reforms to preserve essential health services.
New York has reached a significant milestone in its Medicaid program, recording expenditures of $98 billion over the past year. This immense spending has sparked concerns regarding the sustainability of the state’s Medicaid system, particularly as costs continue to rise. In a state that comprises less than 6% of the U.S. population, New York accounts for a disproportionate share of Medicaid spending, averaging $4,942 per person. This figure surpasses the next largest spender, Kentucky, by 24% and stands 77% higher than the national average.
The Empire Center for Public Policy and State Senator Tom O’Mara have criticized the upward trajectory of costs as being untenable. The primary drivers of this increase include expanded coverage for migrants and ongoing issues related to abuse, fraud, and waste. It has been estimated that streamlining spending to align with states like Kentucky, Massachusetts, or New Jersey could result in potential annual savings between $19 billion and $48 billion.
Looking forward, Governor Kathy Hochul has proposed an increase in the Medicaid budget of $6.4 billion for the fiscal year 2026, raising it to $44 billion. This proposed budget reflects a remarkable 60% increase since Hochul assumed office three years ago. O’Mara has characterized the existing Medicaid structure as both “expensive and dysfunctional,” warning that it imposes significant burdens on local property taxpayers.
Presently, approximately 6.9 million New Yorkers are enrolled in Medicaid, a program crucial for many low-income residents. However, a federal report has indicated that around 1.3 million New Yorkers may lose their Medicaid coverage in the coming decade due to anticipated federal funding cuts. As of May, 65% of New York’s Medicaid recipients are part of managed care plans, often leading to complexities and confusion regarding their coverage. Companies such as Fidelis Care, which serves 1.8 million New Yorkers, run many of these managed care plans.
Managed care organizations are utilized by 40 states and Washington, D.C., to provide Medicaid services, further complicating beneficiaries’ understanding of their insurance landscape. In addition, changes introduced by the “One Big Beautiful Bill” tax law threaten major federal cutbacks to various health care programs, potentially affecting 12 million individuals enrolled across Medicaid, Obamacare, and the Children’s Health Insurance Program (CHIP) nationwide. Notably, these changes are set to take effect primarily in 2027, post-midterm elections.
While states have endeavored to utilize more consumer-friendly names for their Medicaid programs to lessen stigma, this strategy may inadvertently lead to additional confusion regarding the connections to actual coverage. Experts warn that many beneficiaries might not realize their enrollment in Medicaid, creating challenges in meeting new work requirements set to take effect soon. For instance, adults aged 19 to 64 will soon need to verify their employment status biannually, raising concerns about potential coverage loss.
States implementing similar work requirements in the past, like Arkansas, have reported significant disenrollment rates without achieving improved employment outcomes. New York has seen approximately 930,000 individuals disenrolled from Medicaid between March 2023 and March 2025 due to the national unwinding processes post-pandemic. This drop, although considerable, is less severe than declines experienced in states such as Texas and Florida.
Even with losses, New York’s Medicaid enrollment figures in 2025 still reflected a 10% disparity compared to pre-pandemic levels. The state, along with California, has fared relatively well in maintaining enrollment due to expanded access and higher rates of automatic renewals. However, rising uninsured rates continue to raise alarms over potential detrimental health outcomes, especially for individuals with chronic conditions.
In response to anticipated changes, Senator Charles Schumer has introduced a bill aimed at reversing funding cuts to Medicaid, emphasizing the need to protect essential health services for vulnerable populations.
Deeper Dive: News & Info About This Topic
- NBC New York
- Wikipedia: Medicaid
- New York Times
- Google Search: Medicaid New York
- Newsweek
- Google Scholar: Medicaid New York
- City & State NY
- Encyclopedia Britannica: Medicaid
Author: STAFF HERE NEW YORK WRITER
NEW YORK CITY STAFF WRITER The NEW YORK CITY STAFF WRITER represents the experienced team at HERENewYorkCity.com, your go-to source for actionable local news and information in New York City, the five boroughs, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as New York Fashion Week, Macy's Thanksgiving Day Parade, and Tribeca Film Festival. Our coverage extends to key organizations like the Greater New York Chamber of Commerce and United Way of New York City, plus leading businesses in finance and media that power the local economy such as JPMorgan Chase, Goldman Sachs, and Bloomberg. As part of the broader HERE network, including HEREBuffalo.com, we provide comprehensive, credible insights into New York's dynamic landscape.
