House Passes Reconciliation Bill

The Situation Report | May 27, 2025

This past Thursday, the House of Representatives passed the long-awaited Reconciliation Bill.  The bill includes approximately $4 trillion in the extension of the tax cuts, an increase in spending for defense programs and veterans’ health.  It also calls for deep cuts in domestic spending totaling approximately $1.5 trillion. The biggest cuts come in the Medicaid program, where spending is reduced by $650 billion over 10 years. 

It is estimated that New York would see a reduction of $13 billion a year over ten years. These cuts would come in the form of reductions in waste, fraud and abuse; an end to reimbursing Medicaid for undocumented immigrant care and for some in immigrant status under the Essential Plan by the federal government; and placing work requirements on able-bodied adults who do not have children.

The largest cut to New York’s Medicaid system would be through the elimination of certain provider taxes that have been imposed by New York. The Centers for Medicare and Medicaid Services (CMS) has targeted these funds for elimination for several years. New York has taken advantage of a loophole in CMS regulations to fund its Essential Plan and cover approximately half of all enrollees in the plan.  New York estimates 225,000 people will lose essential plan coverage, many of which would then shift to traditional Medicaid. Overall, it is estimated that 1.5 million New Yorkers will lose health care coverage under the House bill.

The bill now moves to the Senate, where extensive changes are expected. The Senate Leadership has stated they want to pass the bill out of the Senate by July 4th, at which time it will need to once again clear the House.