ALBANY (TNS) — New York healthcare officials railed this week against the potential impact of a federal omnibus bill they predict will have sweeping financial consequences for the state’s hospitals and also hundreds of thousands of residents they allege could lose health coverage under the measure.

The massive federal domestic tax and policy package finalized by the U.S. House of Representatives Thursday and touted by President Donald Trump as the “One Big Beautiful Bill,” is a hallmark of his second term and includes a number of hardline measures to cut taxes and social safety net programs.

They include nearly $1 trillion in cuts to Medicaid, the joint federal and state health insurance program, which New York health officials have warned will translate to billions of dollars in losses to state healthcare facilities, as well as having ripple effects for jobs in that industry.

“It’s a fiscal pandemic,” said Bea Grause, president of the Healthcare Association of New York State. “Medicaid is an important funder for all hospitals, and so it will financially hurt almost every hospital across the state of New York — and hospitals are central to the economy of each community. That’s what the average New Yorker should be concerned about.”

Trump and congressional Republicans have countered that the cuts will not impact individuals who are lawfully entitled to the benefits and will focus on eliminating “waste, fraud and abuse.” That assertion runs counter to a Congressional Budget Office analysis that predicts roughly 12 million low-income recipients could lose Medicaid benefits in the next decade. The more than 60-year-old program is used by 70 million lower-income individuals.

U.S. Sen. Thom Tillis, a North Carolina Republican, announced last week he would not seek reelection as he declared his opposition to the bill and warned Trump that he had been “misinformed” about the consequences of the cuts. He also noted that Republicans could face fallout from voters and lose their majority in Congress.

Some Republicans have opposed the cuts but still voted for the legislation, pledging to continue fighting for benefits for those who are entitled and noting they would oppose any future cuts to Medicaid.

Last month, U.S. Rep. Elise Stefanik, a North Country Republican, wrote a letter to Medicaid contractors involved in verification work urging them to ensure the eligibility of enrollees.

“As a member of Congress committed to fiscal responsibility and the integrity of federal entitlement programs, I am dedicated to ensuring that taxpayer-funded resources effectively support our nation’s most vulnerable populations,” Stefanik wrote. “Critical programs such as Medicaid must be safeguarded against waste, fraud, and abuse to allow funds to directly benefit those truly in need.”

Another provision in the bill will require for the first time that able-bodied adults prove they are working or participating in education at least 80 hours per month to receive the benefits. That requirement would also apply to lower-income adults with children older than 14.

DEMS DENOUNCE THE BILL

Democrats and several of the state’s largest healthcare organizations were quick to denounce the cuts, which they say would represent a “devastating” blow to the health care system in New York. In the months leading up to the bill’s expected passage this summer, Republicans have castigated Medicaid for the “waste and fraud” they contend has engulfed the program and say that the proposals are meant to correct overspending.

Opponents contend up to 1.5 million New Yorkers are set to lose health insurance by 2027 under newly imposed restrictions on eligibility, including cutting off coverage entirely for roughly 225,000 non- U.S. citizens because of their immigration status. The state has estimated that 1.2 million residents will lose coverage under work requirements as well as a provision that would compel states to recertify that Medicaid recipients are eligible every six months. Critics have called that provision onerous and said it would cause more people to unknowingly fall off the Medicaid rolls.

Hospitals and healthcare facilities in New York will experience an $8 billion cut, according to hospital leaders.

“All of these costs are layering on at a time when we’re in a very fragile financial state,” said Elisabeth Wynn with the Greater New York Hospital Association. She pointed to 75 hospitals across New York that are deemed financially distressed and which already receive significant state funding to prop them up.

“One of the major concerns coming out of this is, what do those hospitals do? How much additional support can the state provide?” she said.

Already, Democrats have seized on the cuts to hammer the state’s congressional Republicans in vulnerable districts in New York, including U.S. Rep. Mike Lawler, a Rockland County Republican who is eyeing a bid for governor in 2026.

“While Mike Lawler is down in Washington playing politics with millions of New Yorkers’ health care, his constituents are at home dealing with the real, life-threatening consequences of his cowardice,” said Riya Vashi, a spokeswoman for the Democratic Congressional Campaign Committee. “Lawler repeatedly promised voters that he was fighting to protect their health care while voting for the largest cut to Medicaid in American history — and when the time comes, he will cave to his D.C. party bosses and break his promises all over again.”

Lawler’s office did not immediately respond to a request for comment.

MANAGED CARE TAX CANCELED

Another major provision would be the cancellation of New York’s relatively new Managed Care Organization provider tax, which was supposed to bring in $1.5 billion of annual revenue to the state’s Medicaid pool.

That represents a blow to future state budgets, fiscal watchdogs have said. One analysis from the left-leaning Fiscal Policy Institute points to an annual $4.7 billion impact to New York’s annual budget from just two of the new provisions: the loss of the $1.5 billion managed care tax, and the state spending an additional $2.7 billion from its own Medicaid coffers to cover certain immigrants who have lost their eligibility through the federally funded Essential Plan.

To mitigate concerns, federal lawmakers over the weekend added a $50 billion fund in the legislation to assist rural healthcare facilities over five years, which all states including New York will receive some funding from, though its exact allocation is unclear. The hospital associations and other national health care groups have contended that ” Rural Health Transformation Fund” would not adequately offset the losses in other areas.

Grause, with the Healthcare Association of New York State, suggests the impacts are coming as health care for an increasingly older population will become more burdened.

“Hospital demand ticking upward, and the demand for health care workers is ticking upward as well,” Grause said. The MCO tax was meant to increase reimbursement rates for hospitals and other health care facilities to address that demand, she said, calling it “a real step in a terrific direction.”

“Having that all wiped away is catastrophic,” Grause said.

State lawmakers have said they will reconvene later this summer to address the impacts of the “One Big Beautiful Bill,” though Gov. Kathy Hochul has signaled there is little she can do to backfill the entirety of the cuts to Medicaid.

‘WASTE, FRAUD AND ABUSE’

Both in Congress and within New York, Democrats have also been largely dismissive of “waste, fraud and abuse” claims floated by Republicans.

But Medicaid fraud and erroneous spending are frequently addressed by state Democratic officials like state Attorney General Letitia James, who routinely pursues legal action against companies and providers found to be bilking New York’s Medicaid program out of tens of millions of dollars.

Earlier this week, James announced that she had launched investigations of multiple medical transportation companies accused of defrauding Medicaid of millions of dollars. She said another 16 transportation companies had agreed to settlements calling for them to return more than $13 million in fraudulent Medicaid reimbursements, including for fictitious trips and toll charges.

Similarly, state Comptroller Thomas E. DiNapoli has released several audits criticizing lax regulatory oversight of certain state Medicaid spending.

Marissa Crary, a spokeswoman for the state Department of Health, said in a statement that state agencies including the Office of Medicaid Inspector General and the state comptroller’s office ensure the integrity of Medicaid by rooting out instances of incorrect payments, which she added represent a “tiny fraction” of the total Medicaid program.

“The GOP reconciliation bill does not employ strategies to reduce fraudulent spending, but instead applies the largest federal cut to Medicaid in the program’s history, reducing coverage and services for millions of Medicaid members in New York alone,” Crary said.

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