June 17, 2025

Yesterday two important bills made it through the Assembly after having been passed by the Senate earlier this year.  In the days to come both bills will be sent to the Governor for final action.

The first bill makes a technical fix to state laws regarding incoming opioid settlement funds. Specifically, it expands the types of opioid settlement agreements (received by NYS) that must be deposited into the state’s Opioid Settlement Fund account.

The second bill makes significant (positive) changes to the contracting process between nonprofits and state agencies.

THE FOLLOWING BILLS PASSED BOTH HOUSES.  Click Here to Find BillText and Memo

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FEDERAL UPDATE

Last night Chair Mike Crapo released the Senate Finance Committee’s Reconciliation text that addresses provisions within the Committee’s purview.  There are links at the bottom of this note that will take you to several resources that discuss what’s in the Senate Finance release with more detail.

Here’s a high level summary of what’s in the bill regarding Medicaid Work Requirements, provider taxes and state-directed payments.  Note – what’s below is not very specific.  The documents at the links (below) have more specificity.  We are reviewing now.  It should also be noted that some hot button issues are still being negotiated, and the Senate leaders appear to fully expect changes during the coming two-way negotiations to reconcile the different reconciliation bills.

Commonsense Medicaid Reforms

Republicans are improving Medicaid for those who need it while putting it on a fiscally sustainable path by:

Increasing personal accountability:

• Establisheswork requirements for able-bodied adults who are choosing not to work and do not have dependent children or elderly parents in their care.
• Able-bodied adults without dependents can work, participate in a work training program, enroll in school or volunteer for 20 hours per week in order to receive taxpayer-subsidized Medicaid coverage.

Rooting out waste, fraud and abuse:

• Prevents Medicaid payments for beneficiaries who have died, are enrolled in multiple states or do not qualify for the program.
• Increases the frequency of eligibility verifications for able-bodied adults.
• Prohibits states from waiving asset tests for long-term services.
• Removes individuals from Medicaid rolls who have homes worth over $1 million.
• Ensures illegal immigrants do not receive Medicaid benefits.
• Ends Medicaid financing gimmicks that increase federal spending by freezing and reducing provider taxes.
• Ends taxpayer-funded Medicaid payments for abortion services and gender transition procedures.
• Prevents pharmacy benefit managers from overcharging Medicaid for prescription drugs.

Repealing Biden-era regulations:

• Bolsters requirements for eligibility documentation and verification.
• Ensures Medicaid payments are fiscally responsible and align with other federal government programs.
• Prevents one-size-fits-all, burdensome staffing requirements that increase costs on nursing homes and other long-

term care providers.

Click HERE to view bill text.

Click HERE for a section-by-section.

Click HERE for a bill overview.

Click HERE to view the 2025 Tax Reform landing page.

Also see the attached document we first shared last night.

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Medicaid is still set for steep cuts
(Fierce Healthcare, June 16)

The Medicaid program was a key target in Republicans’ efforts to cut spending, with the House version of the reconciliation bill instituting work requirements. The Senate’s version of the bill preserves the work requirements.

Under the bill, able-bodied, childless individuals between the ages of 19 and 64 will be required to complete at least 80 hours of certain activities per month, including work, community service or education programs. The Senate bill frames these changes under the topic of “increasing personal accountability.”

The Senate bill exempts adults with dependent children from the work requirements, but only those adults with children under the age of 14.

Experts have warned that most able-bodied people enrolled in Medicaid are already working, and the requirements add a potentially onerous administrative burden that leads people to fall through the cracks. Work requirements have been a long time policy proposal from Republicans.

The Senate’s bill also takes a more aggressive stance on provider taxes in Medicaid, capping them at 3.5% for expansion states, down from the current 6% rate. The House bill would have instead frozen the taxes at current rates.

The bill would also reduce state-directed payments to providers in expansion states.

The proposed changes to the tax and state-directed payments immediately drew ire from hospital groups following the bill’s release on Monday.

“These harmful proposals will impact access to all patients who are served by our nation’s hospitals and health systems,” said Rick Pollack, president of the American Hospital Association, in a statement. “These cuts will strain emergency departments as they become the family doctor to millions of newly uninsured people. Finally, the proposal will force hospitals to reconsider services or potentially close, particularly in rural areas.”

The reconciliation bill would also prevent federal Medicaid and Children’s Health Insurance Program dollars from being used to cover “specified items and services for gender transition purposes,” per a fact sheet from Crapo’s office.

Medicare spared from major changes despite rumors

As legislators prepared the bill, sources close to the discussions said that significant changes or cuts to Medicare were also on the table, likely through reforms to Medicare Advantage.

The bill would require Medicare beneficiaries to prove their citizenship or legal residency status to continue to receive their benefits.

The proposed package would also bar the Department of Health and Human Services from enforcing regulations that set staffing minimums at long-term care facilities. A federal judge vacated the Biden-era regulation in April following an outcry from the nursing home industry.

NBC News also reported that the reconciliation package would make changes to cost-sharing for dual eligibles.

Other highlights

Senators scrapped provisions in the House bill that would have significantly expanded health savings accounts.

Similar to Medicare, the bill proposal would limit access to premium tax credits under the Affordable Care Act (ACA) to certain immigrant groups and would require individuals who qualify for tax credits to recertify their eligibility, similar to Medicaid eligibility determinations.

Enhanced premium tax credits for ACA plans are set to expire at the end of this year, and the Senate bill does not include measures to extend them. The enhanced subsidies were put in place following the COVID-19 pandemic and have played a key role in a boom in enrollment for marketplace coverage.

Should those tax credits indeed be rolled back, policy experts have said it will likely lead millions to become uninsured.

Republicans in the House were also planning to allow the enhanced subsidies to expire.

Pharmacy benefit managers escaped from the bill largely unscathed despite significant bipartisan interest on the Hill in reforming that sector. The bill would institute a ban on spread pricing in Medicaid, which has largely been criticized by the PBM industry as preventing managed care organizations from selecting the pricing model that best works for them.

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The Medicaid Work-Requirement Push

By Kelly Hooper | Politico | June 16, 2025

THE MEDICAID WORK EFFORT — Congressional Republicans are in lockstep on new Medicaid work requirements not only because they help generate savings for a spending package that extends President Donald Trump’s tax cuts but also because some of them say there is a moral imperative behind the proposed rules, POLITICO’s Robert King reports.

Many of them have long been skeptical about the Affordable Care Act’s Medicaid expansion, which enabled healthy adults to get Medicaid coverage if they earn up to 138 percent of the federal poverty level. Republicans have speculated that a sizable portion of new beneficiaries is not working and taking advantage of the coverage.

“We need to at least make an effort to try to help people, to get their life back together,” Sen. Jim Justice (R-W.Va.) said. “Will that result in a whole bunch of people who will lose their health insurance? I hope to goodness not.”

House Speaker Mike Johnson has said the only people who would lose coverage are those sitting around “playing video games all day.” Other Republicans have said the requirement tackles fraud.

But only about 300,000 of the nearly 5 million people expected to lose coverage if the new requirement becomes law as part of the House-passed GOP megabill refuse to work due to “lack of interest,” a new analysis from the left-leaning Urban Institute shows. That means people willing to work would lose coverage because they either cannot find work or because they cannot overcome administrative hurdles, experts said.

Background: The megabill would require able-bodied, working-age Medicaid recipients to work for 80 hours a month, but they could do volunteer work or go to school. Pregnant women and new mothers would be exempt.

Some of the critics of other megabill Medicaid provisions support work requirements, including Sen. Josh Hawley (R-Mo.). He wants to get rid of new cost-sharing obligations for beneficiaries and a freeze on states’ ability to levy provider taxes.

He has told reporters he is not concerned about the prospect of inadvertent coverage loss, adding that “we can sort that out.”

Even so: There could be a lot to sort out.

“People will have trouble successfully complying with the reporting requirements,” said Katherine Hempstead, senior policy officer for the Robert Wood Johnson Foundation, a liberal philanthropy that commissioned the Urban Institute analysis. “That is what we have found when we studied other states that put work requirements in Arkansas and New Hampshire.”

The nonpartisan Congressional Budget Office estimates that 18.5 million people would be subject to the work requirements each year and 4.8 million people would lose coverage by 2034 for noncompliance.

The estimate means that some people could lose coverage even if they meet the requirement, per the estimates from Urban and an earlier analysis released two weeks ago from the Brookings Institution.

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(The City, June 17, 2025)The “Big Beautiful Bill” passed by House Republicans and President Trump’s proposed budget for the next federal fiscal year together result in pretty ugly consequences for New York, according to new assessments on the impact of the proposed aid cuts.Start with the loss of $13.5 billion a year for the state’s Medicaid program. Then there is the $2.1 billion in lost federal funds that New York would need to spend annually to keep SNAP assistance, aka food stamps, at its current level. Federal housing aid statewide could be cut by $4.4 billion or about 50%. The nonpartisan Congressional Budget Office notes that the Big Beautiful Bill, which is its formal name, will lower incomes for the poorest 10% of Americans by 3.9% annually and raise after-tax incomes for the top 10% by 2.3%“This report should be a flashing red light for all Republicans planning another tax giveaway for the wealthiest few,” said New York Democratic Sen. Charles Schumer in a statement. “Rather than making sure that corporations and billionaires pay their fair share, Donald Trump wants to give them an even bigger share.”While the CBO did not do state-by-state breakdowns, the decline for lower-income households in New York is likely to be larger given the impact on New York’s generous safety net.The Republican bill is now being revised in the Senate, which may make significant changes that could sink the whole effort. It’s designed to extend the individual tax cuts enacted in the first Trump Administration and add new ones. 

To offset the cost, the bill seeks to reduce federal spending on the social safety net and the Trump budget targets other areas for reductions in aid.

The House bill would put a $13.5 billion hole in the state’s $105 billion Medicaid program, the costliest in the nation, according to Gov. Kathy Hochul and the Empire Center conservative think tank.

The biggest blow would eliminate federal aid for a group of legal immigrants who make up about half the enrollment in the state’s Essential Plan, which covers people who make slightly more than allowed or are otherwise not covered by the Affordable Care Act.

Also eliminated are a tax New York charges health organizations in a maneuver that increases federal aid to the state, along with federal aid that winds up paying for Medicaid for undocumented immigrants. Enforcing new work requirements for Medicaid recipients is expected to cost $700 million.

The state would have to choose between making up for the lost funds or seeing 1.5 million people lose health coverage, according to numerous estimates.

In past budget crunches, the state has increased the amount the city must contribute to Medicaid costs, something that could happen again.

Proposed changes to the SNAP food aid program would total another $2.1 billion in added cost to the state or reduced benefits, according to the progressive Fiscal Policy Institute.

The bill requires states to increase their contribution to SNAP, permanently lowers benefits and imposes work rules that could cut off aid to almost 300,000 people statewide, according to the Institute.

“The cost-sharing provisions and work requirements are just thinly disguised spending cuts that risk sending one million New Yorkers into hunger and poverty,” said Fiscal Policy Institute Executive Director Nathan Gusdorf.

“SNAP is also an essential economic stabilization tool that props up purchasing power during economic downturns, thereby protecting lower-income families and small businesses — making it all the more disastrous for the state economy to face these spending cuts as federal tariff and immigration policies bring about an economic slowdown.”

The proposed Trump budget would reduce funds for the federal department of Housing and Urban Development by 43%, slashing the amount the state receives by $4.4 billion, according to an analysis released Tuesday by the New York Housing Conference.

The amount of money allocated for rental assistance through vouchers through the New York City Housing Authority and programs for the elderly and disabled would plunge from $8.8 billion a year to $4.4 billion. A two-year time limit for all voucher recipients who are not disabled or elderly would have enormous impact as well. A NYCHA internal analysis says some 300,000 of New Yorkers could be displaced.

While the Housing Conference did not do a breakdown for the city, work by the NYU Furman Center shows how much the city relies on federal aid — including three quarters of the operating budget at NYCHA, just over half of the $54 million operating budget for the Department of Housing Preservation and Development and 12% for the Department of Homeless Services.

In addition, block grants the Trump plan seeks to eliminate pay for indispensable city jobs like building inspectors and staff at the Department of City Planning, costs the city would have to assume.

“Now that we have program-by-program data, we were able to more precisely estimate what the impact would be, and it’s pretty dire,” said Rachel Fee, executive director of the New York Housing Conference. “These cuts just aren’t hitting tenants but building owners and their lenders.”

After Trump’s 2017 tax bill capped deductions for state and local taxes at $10,000 — dealing a blow to residents of high-tax New York — many states, including New York, created a workaround that converts business owners’ personal income taxes into deductible business taxes that recognize all state and local taxes paid, reducing the federal tax. The owners then make a payment to the state and city equal to whatever their income tax liability would be.

While the CBO says the House Republican bill will boost incomes for the wealthy, some New York business executives could wind up paying an additional $2.7 billion a year in federal income taxes, according to a study released late last week by Comptroller Brad Lander.

The House bill increases to $40,000 the amount of state and local taxes that can be deducted but phases out the increase for anyone making more than $600,000 and outlaws the maneuver that effectively restored SALT deductions for business owners and partners, most of whom make more than that threshold. That would make some high earning New Yorkers some of the only people who would see their taxes go up under Trump’s plan.

“In an ironic twist, Donald Trump’s ‘big, beautiful bill’  hurts the very people who propped up his presidency—the financial and professional services sector. These sectors play a critical role in New York City’s economic engine, which will sputter if the Senate passes this bill,”  said Chloe Chik, a spokesperson for the city comptroller.

No report has yet analyzed how much New Yorkers will save by extending the tax cuts or provisions providing new tax breaks for overtime and tips, and to seniors. Nor has there been a look at  how the increased SALT cap would play out, though it is expected to be helpful for a relatively small number of New York suburban homeowners with high property taxes and incomes below $600,000.

The Republican House bill increases the federal low-income housing tax credit, which helps fund affordable housing and could lead to more construction, according to the Furman Center report.

Proponents claim that renewal of the Opportunity Zone tax credits, also created in the 2017 law, will boost lower-income housing construction, but Furman’s work shows that Opportunity Zones in the city increased market-rate housing that would have been built anyway in relatively well-off neighborhoods in the city.

Even business leaders who see some good in the bill think it will be bad for New York.

“The bill offers significant corporate tax benefits intended to stimulate the economy, but other provisions will damage the capacity of states, cities, and research institutions to continue to drive innovation and economic growth,” said Kathryn Wylde, head of the Partnership for New York City. “Viewed together with erratic tariff, trade, and immigration policies and the rising national debt, it is hard to see a beautiful conclusion to this exercise.”