Medicaid is in the Crosshairs

Don’t think this story is not about you.

May 10, 2025

The federal Medicaid program is the country’s largest health insurance program, providing coverage to over seventy million Americans, including low-income individuals and families, children, people with disabilities, and seniors. As Congress grapples with the White House’s insistence on cutting 20% from non-defense spending, Speaker Johnson is considering drastic cuts to federal Medicaid subsidies in order to balance the budget. The nonpartisan Congressional Budget Office (CBO) has stated that the budget outline passed by House Republicans in early 2025 would require deep cuts to the Medicaid program, in part because President Trump has said that cuts to Medicare are off the table. On February 25, 2025, House Republicans passed a budget resolution instructing the House Energy and Commerce Committee to cut at least $880 billion in costs through 2034.

If you are thinking that cuts to Medicaid funding are not going to impact you personally, you would probably be wrong. Here in the 21^st Congressional District of northern New York (Elise Stefanik’s district), 12.6% of adults over the age of 65, and 66% of adults living in nursing homes are Medicaid recipients. NY-21 has a population of 772,000 people, and over 215,000 of those people rely on Medicaid and CHP, the Children Health Insurance Program (CHP Plus in NY). The Children's Health Insurance Program (CHIP) provides health care coverage to children through Medicaid and separate CHIP programs. Children eligible for CHIP are in families with incomes too high to qualify for Medicaid, but too low to afford private coverage. CHP covers over one third (34%) of our north country children. Medicaid also covers over 33,000 north country residents with disabilities. In total, forty four percent of our local children benefit from Medicaid / CHP coverage, including Medicaid coverage for children in foster care, children with special healthcare needs, and children of low-income families. Eliminating or scaling back the Medicaid benefits to these individuals will cause enormous hardship to the most vulnerable members of our community, and the people that we care about the most—our children and our parents. In all likelihood, you or someone you know is about to get hurt.

Medicaid is a state and federal partnership, with both contributing to the coverage that recipients enjoy. The cost of standard Medicaid benefits is shared 50%/50% by the federal government and the individual states. In an effort to expand health care coverage during the implementation of the Affordable Care Act (ACA), sometimes called Obama Care, the ACA provided for an enhanced “federal medical assistance percentage” (FMAP) of 90% to cover state Medicaid costs for people with incomes below 138% or the federal poverty level. For a family of four living in the 48 contiguous states, the federal poverty level is $32,150. For a single individual, the level is $15,650. This enhanced funding structure under FMAP has enabled forty states to expand Medicaid, thereby providing health care to over twenty million Americans.

Speaker Johnson is considering proposals which include reducing the 90% FMAP reimbursement rate and shifting that burden to the individual states. Medicaid funding already constitutes New York State’s largest expenditure, accounting for 28% of the state’s total budget. Shifting the burden from the federal budget to the state’s will only exacerbate an untenable and unsustainable growth in state mandatory entitlement spending, inevitably requiring offsetting savings with cuts to other services. The Center for American Progress (CAP) estimates that cutting the enhanced FMAP for expansion enrollees would lead to deaths in each congressional district—as many as hundreds in some. In the CAP analysis, the expansion of Medicaid to fund health care premiums for qualifying individuals in New York’s 21^st Congressional district provided health care coverage for 37,700 residents and saved 119 lives annually. They propose that eliminating the expansion will eliminate coverage for those families, and by extension, put those lives at risk.

As of this writing, Speaker Johnson is under pressure from a group of moderate Republicans (read Republicans in blue and purple states) to dial back any changes to the 90% FMAP expansion subsidy. This is the same group that also wants to eliminate the $10,000 SALT cap on the deductibility of state and local taxes. Beneficiaries of this lobbying effort are the same blue state residents with high state tax rates. There is much legislative sausage to be made in the next few weeks.

The prospect of any reduction in Medicaid benefits is most concerning to health care providers in rural areas, where the economics of providing health care services are already stressed. Any rural business is handicapped by a lack of scale, whether it be a school system or a fire district or a hardware store. Or a hospital. Here in the Adirondacks of northern New York, 123,000 residents are spread out over 9,375 square miles, approximately 6 million acres, in over 100 towns and villages. There are not enough people in most of those towns to support their own fire department, or school system – or a family doctor. Certainly not a hospital. The systems that do provide health care services, Hudson Headwaters in the southern Adirondacks and The University of Vermont Health Network in the northern and eastern Adirondacks (Plattsburg and Elizabethtown), struggle to make the math work in many if not most of their local facilities. Any additional strain on the financials risks putting those operating financials into the red. Medicaid is how they keep the doors open in many cases.

Given the outlook for substantial disruption to the Medicaid program, a group of (mostly) retired health care professionals and other north country community leaders, the Health Care Coalition for the North Country banded together to make sure that the community realized what could happen to local health care if these proposed cuts were actually implemented. The coalition is a nonpartisan, nonpolitical organization whose mission is to make sure people understand how important Medicaid is to north country health care (and all rural health care) and also to make sure that all eligible Medicaid recipients continue to have access to the health care that they deserve. The group is led by Dr. John Rugge, the retired CEO and founder of Hudson Headwaters. Dr. Rugge had also served as a Trustee / Director of the University of Vermont Health Network. He retired from the UVM Health board in January. Dr. Rugge is intimately familiar with the operations of both health care providers, and he is also intimately familiar with how perilous the situation would be for north country residents if the Medicaid cuts being discussed in Congress were enacted. Retirement would have to wait.

With a very short time line to accomplish their mission, the coalition’s network of volunteers is attempting to meet with community leaders and Town Supervisors throughout the north country to assure that everyone is aware of the impact that these proposals would have in their communities. The coalition also seeks to solicit their support in asking our elected officials to act with thoughtfulness and to have an informed dialogue with local officials and health care providers before implementing cuts that will negatively impact our regional health care services. (Full disclosure: I am a volunteer with the Health Care Coalition for the North Country.)

A robust health care network is integral to the vitality of any community. The impact of these proposed cuts will go far beyond the personal impact on the families dependent on Medicaid. Attracting new residents to live in the Adirondacks requires their having access to family health facilities, particularly family medicine and pediatrics. The fastest growing segment of the Adirondack population is the retiree population, and seniors do not want to live ninety minutes from the nearest health center or hospital. A thriving health care system is vital to any community, and in the Adirondacks a very large and important piece of the financial puzzle depends on providing health care services to the most vulnerable segments of our population: seniors, children, and residents with disabilities—i.e., Medicaid beneficiaries.

The impact of these proposed cuts to Medicaid would reverberate far beyond the families whose health care coverage is disrupted. We cannot exist as a community without a vibrant network of health care practitioners, and that network depends on Medicaid.

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