New York State Plans Huge Medicaid Cuts if Federal COVID-19 Relief Doesn’t Arrive

April 20, 2020

New York Governor Andrew Cuomo warned at his daily COVID-19 briefing today that absent major Federal funding relief, the State will have no choice but to reduce health care spending by up to 20%, with similar cuts to education and local governments.

The efforts to stop the spread of the virus have resulted in a deep economic downturn. As a result, the State is facing the loss of approximately 14% of its revenues, or about $12 billion. Unlike the Federal government, the State must balance its budget. Without Federal support to offset these losses, the State must reduce spending to align with available revenue.

The State could begin making these reductions as early as June 1, following the mid-May release of the New York State Comptroller’s monthly cash report. This means there is still time for Federal action to offset the cuts, and each of us should be contacting our Federal representatives to make sure they understand that if they do not provide unrestricted funding to states, State funding for hospitals will be reduced just as we need it most.

We will keep you informed of all COVID-19 funding developments, including negotiations that continue today on targeted Federal funding for hospitals in COVID-19 hot spots such as the New York City area.