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New York City’s municipal health care system could face steep losses if Congress pursues proposed spending cuts that slash Medicaid, city leaders warned Thursday.
“We’re certainly very, very worried, given the size of the cuts that have been talked about,” Dr. Mitchell Katz, the president and chief executive of NYC Health + Hospitals, told members of the City Council during a budget hearing on the health care system’s $2.28 billion proposed budget for the 2026 fiscal year.
The potential cuts, he said, could mean “hundreds of millions of dollars” in losses for the health care system, likely leading to reduced services.
Medicaid, the public health insurance program for people with low incomes or disabilities, could be on the chopping block as Congress seeks $880 billion in federal spending cuts over the next decade. In New York state, Medicaid provides coverage to about 7.5 million residents, and comprises a large portion of the state’s overall health budget. New York spends the most per capita on Medicaid compared to the other states, making it particularly vulnerable to potential cuts.
NYC Health + Hospitals, the country’s largest municipal health care system, serves more than 1 million New Yorkers each year, the majority of whom are on Medicaid or uninsured. Katz noted that while NYC Health + Hospitals receives a small number of federal grants, a significant part of its budget comes from Medicaid and Medicare payments.
“The Medicaid cuts would be absolutely devastating for our public hospitals,” Council Member Lincoln Restler, a Brooklyn Democrat, said during the hearing.
Restler pressed Katz on whether federal cuts could lead to the closure of facilities.
Potential impacts would depend on the depth of the cuts, as well as the extent to which the state and city could step in to help, Katz said. But cuts of any size, he said, would likely result in fewer services, or job losses.
“There’s no way around that possibility,’’ he told lawmakers. “So I hope that the cuts are not as horrible or deep as what people say.”
Public health pilot programs discussed
During the budget hearing, City Council members also considered NYC Health + Hospitals pilot programs proposed in Mayor Eric Adams’ preliminary budget.
One new program, “Bridge to Home,” aims to offer a supportive environment for patients with serious mental illness who are ready for discharge but are homeless. The program, budgeted at $6 million for fiscal year 2026, would operate at two sites, with 50 beds each, helping participants transition to permanent housing after six to 12 months.
Katz testified that the program would likely be a satellite of Bellevue Hospital, one of the eleven hospitals within the NYC Health + Hospitals system.
The program’s 100-bed total capacity would be able to serve about 10% of the roughly 1,000 New Yorkers who, according to Katz, are unhoused and live with serious mental illness.
Restler voiced support for the Bridge to Home program, but said that he wanted to see NYC Health + Hospitals do a better job of providing “warm handoffs” to homeless outreach organizations for patients being discharged fro hospitals.
“If we can do a better job of actually not allowing the front door of our hospital to be the place where we’re just sending people out to go right back out on the street or trains, we will be addressing this much more effectively,” he said.
Adams’ preliminary budget also includes an initial investment of $2.6 million for the piloting of “NYC Baby Boxes,” an initiative that aims to distribute a box of baby supplies — including diapers, wipes, clothing, bathing and feeding supplies — to every family that delivers a baby at Jacobi and Lincoln Hospitals in the Bronx, Elmhurst Hospital in Queens, and Kings County Hospital in Brooklyn.
Katz said that the goal of the program is to help all New Yorkers begin life with a new child equipped with basic resources.
”A lot of the patients that we care for don’t have the kind of social circles that result in the baby showers that many of us enjoyed when we were first parents,” he said.
Eliza Fawcett is a reporter covering public health in New York City for Healthbeat. Contact Eliza at efawcett@healthbeat.org.
