May 6, 2025
Medicaid Offers a Strong Return on Investment for States
May 5, 2025
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Medicaid was created to help people with low income afford health care, and it has become a lifeline for many, including pregnant women, children, and people with disabilities.
In our new explainer, Celli Horstman and colleagues highlight the value that states reap from the program. They show how Medicaid investment has a multiplier effect: every dollar spent generates more than a dollar’s worth of economic activity.
Learn how Medicaid boosts state and local economies, improves employment rates, and strengthens job retention — and how the prospect of $880 billion in Medicaid cuts could impact state economies.
RESOURCE: The President’s FY 2026 Discretionary Budget Request, White House, May 2, 2025.
Hochul to get expanded authority to make midyear budget cuts
With financial turmoil on the horizon promising a recession, legislators have agreed to allow the governor to recommend cuts they would still need to approve.
By Rebecca C. Lewis, City & State
Assembly Speaker Carl Heastie confirmed that legislators will give Gov. Kathy Hochul broad authority to make mid-year budget cuts in order to respond to a potential recession and fiscal turbulence caused by federal action. Lawmakers previously granted then-Gov. Andrew Cuomo similar power during the COVID-19 pandemic, but the new language has some more rules in place.
Reports emerged last week, as budget negotiations dragged on, that Hochul sought the ability to address an economic downturn by making cuts to the state’s spending plan during the year. Talking to reporters in the state Capitol on Monday, Heastie said that the Legislature had agreed to grant her that authority – with some caveats. “If the governor wants to be able to recommend a series of cuts, the Legislature would have the ability to say ‘no’ or ‘go ahead,’” he said. Heastie made clear that lawmakers would not grant Hochul unilateral power. “This idea, which is giving the governor unmitigated powers to make cups, is not true.”
According to Heastie, the language set to be included in the final budget would allow state budget director Blake Washington to recommend a series of cuts, and lawmakers would have 10 days to respond. They can either accept the cuts, or come up with equivalent cuts elsewhere. But Heastie referenced “another provision” legislators are trying to work through before mentioning state reserves. “That would be part of any conversation before we do any cuts,” he said.
The speaker didn’t offer more specifics on what the provision would look like, but a source familiar with talks said that the governor would only be allowed to recommend cuts if the state has lost at least $2 billion in tax revenue. Anything less than that would not trigger the governor’s authority. The source also provided more details on how the Legislature could object to the budget director’s proposed cuts by recommending their own cuts to find an equivalent amount of savings. In that case, the Legislature would pass a resolution saying that the governor would not have veto power over the Legislature’s counter-proposal.
If the budget includes the measure as described, the governor would have less authority to make mid-year cuts than Cuomo did during the pandemic. The measure approved in the 2020 budget included much vaguer language. Whereas the current proposal would set the floor at $2 billion in lost tax revenue, the COVID provision allowed the state budget director to make quarterly cuts if revenues fell below projections by any amount or if spending exceeded expectations. Spending in the enacted budget is almost always higher than original projections. The 2020 measure also similarly gave the Legislature 10 days to accept the cuts, or propose their own.
In addition to discussing the emergency powers the Legislature will grant the governor, Heastie told reporters that the budget is “99.9% done,” essentially confirming what the governor had said earlier on Monday. “We’re done,” Hochul told reporters on Long Island. “They’ll be voting any moment.” That assessment was perhaps a little too optimistic, though, as Heastie said that bills will be printed at the earliest on Tuesday and at the latest on Wednesday.
Gift article (below) courtesy of the NYS Council from the NYT:
Cuomo Says New York Has a Mental Health Crisis. Here’s His Plan.
Former Gov. Andrew M. Cuomo will release a proposal to remove more mentally ill people from the streets to address fears about public safety
Gift article (below) courtesy of the NYS Council from the NYT regarding state uses of provider taxes and Congressional focus on closing the loopholes:
G.O.P. Targets a Medicaid Loophole Used by 49 States to Grab Federal Money
States have long used taxes on hospitals and nursing homes to increase federal matching funds. If Republicans end the tactic, red states could feel the most pain.
Republicans have “broad consensus” over some policies to reduce Medicaid spending, Rep. Mariannette Miller-Meeks (R-Iowa) said at the AHA conference on Monday, according to Daniel, who was in the room.
Twenty state attorneys general are suing the Trump administration for its actions to restructure HHS, eliminate offices and drastically cut the federal healthcare workforce. The AGs argue HHS’ reorganization and mass firings bypass Congress and violate the Constitution.
State attorneys general are once again helping lead the legal resistance against controversial actions undertaken by the Trump administration and Department of Health and Human Services (HHS) Secretary Robert F. Kennedy Jr.
A newly filed lawsuit focuses strictly on actions taken by the HHS to restructure the agency, eliminate offices and drastically cut the workforce. In it, 20 state attorneys general plaintiffs are urging the court to provide injunctive relief and to reinstate critical programs.
Like lawsuits preceding the attorney-general-led complaint (PDF), plaintiffs argue actions surrounding the HHS reorganizations bypass Congress and violate federal law and the Constitution.
Programs affected by workforce reductions include a team maintaining the federal poverty guidelines, determining Medicaid eligibility and managing substance abuse and mental health services. The sudden changes will also impact tobacco prevention programs and the World Trade Center Health Program for first responders and survivors of the Sept. 11 terrorist attack as well as labs tracking infectious diseases.
“This administration is not streamlining the federal government; they are sabotaging it and all of us,” said New York Attorney General Letitia James in a statement. “When you fire the scientists who research infectious diseases, silence the doctors who care for pregnant patients, and shut down the programs that help firefighters and miners breathe or children thrive, you are not making America healthy-you are putting countless lives at risk.”
More cuts are on the way if a Trump-supported budget is approved, yet resources to the HHS have already been “deprived” in the wake of the mass reorganization, the lawsuit explains.
“There was no one to answer the phone, factories went into shutdown mode, experiments were abandoned, trainings were canceled, site visits were postponed, application portals were closed, laboratories stopped testing for infectious diseases such as hepatitis, and partnerships were immediately suspended,” the plaintiffs wrote, recalling the initial days after the reduction in force at the HHS April 1.
Most recently, HHS denied a CBS News report the department eviscerated the remaining offices and laid off staff May 2 at the National Institute of Occupational Safety and Health. Workers told CBS employees represented by unions were on the job when they received layoff notices.
The new lawsuit comes just days after a collection of labor unions, nonprofits and city governments joined in suing a host of federal agencies and the Department of Government Efficiency (DOGE) for past reductions in force in a recent lawsuit.
Those plaintiffs included the American Public Health Association, the American Federation of Government Employees, the Service Employees International Union, the Main Street Alliance, the city of Baltimore, the city of Chicago and the city and county of San Francisco.
They claimed recent actions undertaken by departments like the HHS to fulfill a February executive order to mass terminate government employees unlawfully bypasses Congress, exceeds presidential authority and violates separation of powers under the Constitution.
“The president does not possess authority to reorganize, downsize or otherwise transform the agencies of the federal government, unless and until Congress authorizes such action,” the union-led lawsuit (PDF) reads.
President Donald Trump tried, and failed, to obtain congressional approval to remake these agencies in his first term, the lawsuit continues, and the courts have routinely rejected the administration’s attempts to shift responsibility and authority to agencies after the fact. Instead, the complaint acknowledges the DOGE, the Office of Management and Budget and the Office of Personnel Management tasked agencies to undergo the reform.
At the HHS, approximately 10,000 employee positions were eliminated. The department will undergo a reorganization that will see the agency eliminate whole offices, moving some functions under a new Administration for a Healthy America. A leaked budget showed the department’s budget could be slashed by $40 billion. The Office of Management and Budget released a “skinny budget” May 2, which mirrors many elements of the leaked budget.
In the Department of Veterans Affairs, more than 83,000 jobs will be cut, the union-led lawsuit estimates.
“The President may exercise Article II authority to create, reorganize or abolish an office that he established (such as the Executive Office of the President), but Article II does not authorize the President to fundamentally reorganize the executive branch by, for example, ordering government-wide terminations of federal employees, or restricting or abolishing the congressionally authorized work of even a single agency that he did not establish,” the lawsuit argues.
Public health leaders have decried the takeover of the humanitarian aid agency the U.S. Agency for International Development.
Most recently, the Trump administration announced it would move forward with instituting “Schedule F,” a policy to make it easier to remove up to 50,000 more workers in the federal government.
Recent polling from KFF finds 6 in 10 Americans oppose major cuts to staffing and spending at federal health agencies, and a majority of respondents believe the DOGE has gone too far.
Although Republicans largely support actions taken by the Trump administration, most Republican respondents also oppose cuts toward infectious disease tracking, mental health services, Medicaid and Medicare.