Trump’s Tax and Spending Bill Sparks Alarm at New York Hospitals Over Medicaid Cuts

NEW YORK – Hospital officials across New York are sounding the alarm about a new tax and spending package backed by former President Donald Trump, warning that it could devastate Medicaid reimbursements and lead to drastic cuts in health services statewide.

According to early estimates, the proposed legislation — a sweeping megabill combining tax breaks and federal spending limits — would cost New York approximately $3 billion in annual Medicaid reimbursements, with the impact falling hardest on public hospitals and vulnerable patients.

“This is a gut punch to safety-net providers,” said Dr. Mitch Katz, CEO of NYC Health + Hospitals, the nation’s largest public health system.

What’s in Trump’s Spending Plan?

The plan, as explained by Gothamist, combines:

• Large tax cuts

• A repeal of key portions of the Affordable Care Act (ACA)

• Reductions to federal Medicaid spending

• Caps on federal funding sent to high-cost states like New York

It includes a per-capita Medicaid cap that would limit how much the federal government reimburses each state per enrollee, a change that disproportionately affects states with large and complex patient populations.

New York’s Safety-Net System at Risk

Healthcare officials warn the financial blow would be especially harmful to safety-net hospitals that serve low-income, uninsured, and underinsured patients — including many immigrants, seniors, and people with chronic conditions.

“New York doesn’t just treat its residents,” said Dr. Katz. “We take care of everyone who walks through our doors, and these cuts would make that impossible.”

NYC Health + Hospitals alone could lose hundreds of millions annually, he added, jeopardizing emergency care, mental health services, and even staffing.

Elected Officials Push Back

Democratic leaders in New York have vowed to fight the legislation. Governor Kathy Hochul, U.S. Senator Chuck Schumer, and Rep. Jerry Nadler are among those who’ve spoken out against the bill, arguing it would leave states like New York footing the bill for health services they can’t opt out of providing.

“Trump’s budget is a betrayal of working families,” said Rep. Nydia Velázquez, noting that many of her Brooklyn constituents depend on Medicaid coverage.

The state legislature is also weighing emergency budgeting scenarios, should the federal cuts pass in Congress.

Hospitals Warn of Ripple Effects

In addition to funding losses, hospital administrators warn of potential:

• Layoffs of nurses, doctors, and social workers

• Longer ER wait times

• Reduced behavioral health access

• Delays in elective and preventive procedures

Some private hospitals may be able to absorb the changes, but public and community hospitals will be forced to make tough choices almost immediately.

How would Medicaid cuts impact your community’s access to care? Should high-cost states receive more federal support? Share your thoughts at SaludaStandard-Sentinel.com.