By Staff Reporter
BUFFALO — Starting today, New York’s Medicaid computer system begins sorting lawfully present immigrants by who pays for their care: Washington, or New York alone.
The change is technical, but it shows how a federal law passed in Washington 15 months ago is now reaching state and county budgets. A Sept. 29 directive from the state Department of Health tells county social services offices that its Welfare Management System will be updated in an “October migration, scheduled for October 19, 2026.” After the update, caseworkers can flag which Medicaid cases Washington still helps pay for and which ones New York now pays for alone.
That is one piece of what Erie County Executive Mark C. Poloncarz calls “The Big Shift.” H.R. 1, the 2025 federal budget law its Republican backers named the One Big Beautiful Bill Act, moves costs for health coverage and food aid from Washington to Albany and from Albany, possibly, to counties. Two of those shifts, for immigrant health coverage and for the cost of running SNAP, took effect Oct. 1.
The largest bill hasn’t arrived yet. Albany still hasn’t said who will pay it.
“The ‘One Big Beautiful Bill Act’ that congressional republicans are now trying to hide from after voting for it is really ‘The Big Shift’ because it is shifting service costs from the Federal Government down to State & Local Governments,” Mr. Poloncarz said when he released his 2027 budget on Oct. 15. “The Big Shift is already having an impact on us.”
What changed on Oct. 1
Under the state directive, as of Oct. 1, federal Medicaid money generally covers only citizens, green-card holders who have finished or are exempt from a five-year waiting period, Cuban-Haitian entrants, and migrants from three Pacific island nations under the Compacts of Free Association. Refugees, asylees and several other lawfully present groups no longer qualify for federal matching funds. Western New York has resettled refugees for decades.
New York is not dropping them. The directive says “these federal changes do not mean that individuals in these categories will no longer be eligible for health coverage in New York, but rather that federal funding is no longer available.” Adults ages 21 to 64 will move to the state’s Essential Plan if they qualify. Others, including some nursing home residents, stay on Medicaid with state-only dollars. Children and pregnant people keep federally funded coverage under a separate law.
One group gets no backstop. Affected immigrants on Medicare lost the Medicare Savings Program, which helps low-income seniors pay Medicare premiums and cost-sharing, at the end of September. The directive says “State-only funding is not available for MSP.”
Also on Oct. 1, the federal share of SNAP administrative costs, which covers caseworkers, offices and computer systems, fell from 50 percent to 25 percent. New York is one of 10 states where counties administer SNAP, so counties now cover 75 percent.
The July coverage cliff
The first major change came in July. H.R. 1 eliminated about half the funding for New York’s expanded Essential Plan. The state ended a federal waiver and returned the program to its original design, which protected coverage for about 1.3 million low-income enrollees. About 450,000 people with incomes between 200 and 250 percent of the federal poverty level lost eligibility on July 1.
When the state announced that plan in March, Danielle Holahan, executive director of NY State of Health, said, “No New Yorker should have to choose between keeping the lights on and seeing a doctor.”
The state’s own numbers show how that transition went. A NY State of Health fact sheet current as of Aug. 30, when the special enrollment window closed, shows 256,159 people, or 59 percent, signed up for other coverage through the marketplace. Most were people whose incomes had changed enough to keep them in the Essential Plan or move them to Medicaid. Only 59,353 bought a private Qualified Health Plan, a 28 percent take-up rate among those eligible. Another 177,841 people did not enroll in anything through NY State of Health. Some may have found employer coverage. The state hasn’t said how many are now uninsured.
Those plans cost more than they used to. Enhanced federal premium tax credits expired at the end of 2025. Gov. Kathy Hochul’s office estimated in January that subsidized Western New York couples would pay an average of $267 more a month, a 38 percent increase. In the same release, her office wrote that “no one state can backfill the immense losses felt from federal funding reductions enacted under H.R.1.”
The numbers in Albany’s own books
The costs show up in Comptroller Thomas P. DiNapoli’s July review of the state’s 2027 enacted budget:
- The state budget division estimates that covering affected Essential Plan enrollees with state-only money will cost “nearly $7 billion through SFY 2028.”
- Federal Essential Plan receipts are projected to fall from $14.6 billion in fiscal 2026 to $9.1 billion this year, then below $7 billion. For fiscal 2030 the projection is listed as “TBD.”
- Money left in the program’s federal trust fund is expected to last only through Dec. 31, 2028.
- The state’s share of Medicaid is projected at $48.2 billion this year, up $5 billion, or 11.7 percent. Medicaid is projected to exceed the state’s self-imposed global spending cap by $430 million in fiscal 2028, $676 million in 2029 and $3.2 billion in 2030 “as Essential Plan-related costs shift to Medicaid.”
The comptroller’s analysts warned that “many individuals are likely to become uninsured, driving increased uncompensated care costs for safety-net hospitals and the State.”
In Western New York, the main safety-net hospital is the Erie County Medical Center. ECMC laid off workers this year after about $79 million in state Vital Access Provider Assurance Program aid ran out in January, according to the Civil Service Employees Association. The union reported that ECMC would need an estimated $10 million to $20 million advance on future aid to protect jobs and services. Mr. Poloncarz’s budget also flags rising mandated indigent-care subsidies to ECMC as “another cause for concern.”
“We have to take anybody and everybody,” Bill Wilkinson, president of CSEA’s Erie County Local, told the union’s newspaper. “Even if someone goes somewhere else, they often end up here because they’re on Medicaid.”
Rep. Tim Kennedy, a Buffalo Democrat who voted against H.R. 1, linked the law to closures at Kaleida Health and job losses at ECMC at a July event with House Democratic Leader Hakeem Jeffries, Buffalo Toronto Public Media reported.
“Right here in Buffalo, we’re seeing the consequences firsthand: healthcare services disappearing, jobs being lost, costs being pushed onto the people that can least afford them,” Mr. Kennedy said.
Republicans who backed the bill describe it differently. Rep. Nick Langworthy, a Republican whose district covers much of rural Western New York, defended the Medicaid changes as the bill moved through Congress in 2025. He said they would remove ineligible people and “able-bodied adults who refuse to work” from the rolls, Finger Lakes 1 reported.
“Medicaid was never meant to be a blank check,” Mr. Langworthy said. “It’s a lifeline for the vulnerable—not a benefit for those who can work but choose not to.”
The SNAP bill coming in 2027
The largest single cost is still a year away, and it is tied to New York’s own performance.
Starting Oct. 1, 2027, H.R. 1 requires states to pay part of SNAP benefits, which until now have been fully federal. The share depends on a state’s payment error rate, which measures over- and underpayments, not fraud. States below 6 percent pay nothing. States at 10 percent or higher pay 15 percent of benefits.
The U.S. Department of Agriculture released fiscal 2025 rates in June. New York’s was 13.18 percent, down from 14.09 percent the year before. The national rate was 10.62 percent.
“These payment error rates are further proof that state accountability is severely lacking in SNAP,” Agriculture Secretary Brooke L. Rollins said.
New York’s improvement cost it a delay. A late change to the bill gives states with error rates above 13.33 percent two extra years before the cost share starts. New York’s 2024 rate would have qualified. Its 2025 rate misses by about 0.15 percentage points. Hunger Solutions New York estimates the 15 percent share will cost about $1.2 billion a year. The New York State Association of Counties puts the state’s exposure at about $1.1 billion.
Under existing state law, counties pay a share of many social services costs. That raises the question NYSAC calls unresolved in its June report: “whether the State will absorb that cost or shift some portion to counties and New York City.”
Erie County has estimated its share if Albany passes the cost down: about $55 million a year. That is more than four times the $12.7 million property tax levy increase in Mr. Poloncarz’s 2027 budget.
Two estimates for Erie County, and a quiet line in the financial plan
The administrative shift is already in county budgets, and the estimates don’t agree.
NYSAC’s county-by-county table estimated $168 million a year in new costs statewide. Its Western New York figures:
- Erie County: $6.38 million (132,985 SNAP recipients; $332 million in annual benefits)
- Niagara County: $1.56 million
- Chautauqua County: $984,000
- Cattaraugus County: $720,000
- Allegany County: $364,000
Erie County’s own budget puts its cost at $10.2 million in lost federal reimbursement for 2027. A 50 percent increase in employment and training costs adds $3.6 million, for a total of $13.8 million. The county’s public budget materials do not explain why its figure is higher than NYSAC’s. The Chronicle is asking the county budget office to explain the difference.
The state’s position is less clear. The comptroller’s report quotes a line in the state financial plan saying spending at the Office of Temporary and Disability Assistance this year “reflects projected costs for the anticipated fiscal penalty assessed to the State related to the SNAP quality control error rate to be paid to the Federal government on behalf of the local districts, as well as additional administrative costs sharing increases.” The comptroller noted the plan “does not quantify these costs.”
County leaders say they have no commitments. Discussing the association’s requests for state help, Stephen J. Acquario, NYSAC’s executive director, told Spectrum News, “There have been no commitments made by the governor, by the budget director of the state of New York.”
Without help, he said, counties must stay under the state’s property tax cap: “That is a very difficult thing to do to stay under this property tax cap, which means we have to cut programs and services, pave less roads and bridges.”
Mr. Poloncarz said Erie County would keep talking with state officials before the next budget. “We certainly hope the state will not pass on additional costs with Medicaid associated with the big ugly bill,” he said. If costs are passed down, he said, everything would be on the table for 2028. “We just have to wait and see.”
Some local officials put it more bluntly. Onondaga County Executive Ryan McMahon, a Republican and NYSAC president, told City & State in April, “If you’re going to change the rules, then pay for it.”
The money on the table
The state has more room to act than it expected. Mr. DiNapoli reported Oct. 16 that tax receipts through September totaled $68.5 billion, $7.3 billion above the budget division’s forecast. The General Fund closed September with $63.9 billion, $9.7 billion more than projected. The Chronicle reported last week that watchdogs disagree on what to do with that money.
“Higher state tax collections, particularly personal income and business tax receipts, are partially a result of financial market growth,” Mr. DiNapoli said. “While strong financial market growth bodes well for some, we must ensure the economy works for all New Yorkers.”
Much of that windfall comes from Wall Street, and it won’t necessarily repeat. Still, the gap between this year’s surplus and the costs coming in 2027 and 2028 is now the central question for the state budget. The budget division’s mid-year financial plan update is due by Oct. 30, the first official chance for the Hochul administration to show how it is accounting for H.R. 1.
Who is accountable, and what could fix it
Congress wrote these cost shifts, and only Congress can undo them. Western New York’s delegation split along party lines. That leaves several choices for Albany and the counties:
- Say who pays the SNAP benefit share. The mid-year update and Ms. Hochul’s January budget proposal could state plainly whether the state will absorb the 2027 benefit cost or pass part of it to counties. Counties are writing 2027 budgets now and need to know.
- Cut the error rate. H.R. 1 lets a state use its fiscal 2025 or 2026 error rate to set its share. If New York’s 2026 rate falls below 10 percent, its share drops from 15 percent to 10 percent, saving about a third of the bill. NYSAC says many errors come from changing wages and late paperwork, which more caseworkers and better data matching can reduce. The administrative cut makes those workers harder to pay for.
- Set aside the windfall. The comptroller’s report says the budget division is putting this year’s Essential Plan savings aside for future costs. Lawmakers could set aside part of the $7.3 billion surplus specifically for the 2027 and 2028 federal shifts, rather than leaving it in general reserves.
- Protect safety-net hospitals before work requirements begin. Medicaid work requirements and six-month renewals start Jan. 1. Erie County expects 5,000 to 10,000 residents to lose Medicaid. The state could use automatic data matching, such as wage records and existing SNAP files, so eligible working people aren’t dropped over paperwork. It could also say early whether ECMC will get the aid advance CSEA said the hospital needs.
- Count the uninsured. The state knows that 177,841 people dropped by the Essential Plan did not re-enroll through NY State of Health. It could report, by county, how many of them end up uninsured.
The Chronicle is seeking comment from the governor’s office, the Division of the Budget, the Office of Temporary and Disability Assistance, the Erie County budget office and NYSAC, and will update this story with any responses.
Featured photo: The Edward A. Rath County Office Building in downtown Buffalo, home to Erie County offices including the Department of Social Services. Photo by Fortunate4now via Wikimedia Commons, public domain.
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