The Medicaid program is a Federal-State partnership, under which state spending automatically draws down Federal matching funds. So, when New York State cuts spending in the Medicaid program, the Federal government also reduces the Medicaid funds it sends to New York State.
Under the present formula, if the State cuts around $40.00 in spending, medical providers lose another $60.00 in Federal aide, for a total loss of $100. Or put more simply, for each dollar cut by the state, New York healthcare providers lose another $1.60, for a total loss of $2.60.
All budget cuts are not created equal. A cut in New York State’s Medicaid spending results in huge overall losses to healthcare providers across the State.