2026-27 FY Budget Memo

Alyssa Lovelace • June 3, 2026

NYS Budget Passes with Six Legislative Session Days Remaining


After eight weeks and 15 extender bills to keep state government funded, the Legislature passed the final New York State (NYS) Fiscal Year (FY) 2026–27 Budget.

The Enacted All Funds budget is $268.1 billion for FY 2026-27, $5.4 billion over the Executive’s proposed budget. 

The final budget includes significant investments and policy changes across the healthcare continuum, totaling $147.2 billion in All Funds appropriations — an increase of $10.1 billion above the Executive Budget proposal. 

The Enacted State Budget prioritizes healthcare system stability, Medicaid sustainability, public health programs, hospital and nursing home support, workforce initiatives, and preservation of essential healthcare services. 


The Enacted Budget Includes the Following:

Healthcare Stability and Medicaid Investments

The budget includes substantial investments to stabilize New York’s healthcare system, particularly hospitals, nursing homes, and safety-net providers.

The Legislature allocated:

  • $500 million for financially distressed hospitals;
  • $2.2 billion through the Healthcare Stability Fund (HSF); and
  • $8.5 billion to continue the Essential Plan following federal approval to reactivate the 1331 Basic Health Plan.

Healthcare Stability Fund disbursements include:

  • $711 million for hospitals;
  • $500 million to offset Medicaid Global Cap costs, and extends the legal authority for the Medicaid Global Cap through FY 2028.
  • $433 million for nursing homes;
  • $330 million for the Safety Net Transformation Program;
  • $100 million for the Home Care Worker Quality Program;
  • $50 million for the Mainstream Managed Care Quality Pool;
  • $50 million for physician fee schedule enhancements;
  • $40 million for clinics;
  • $18 million for Assisted Living Programs and hospice care; and
  • $15 million for Value Based Payment innovation initiatives.

Managed Care Organization (MCO) Provider Tax

The FY 2026–27 budget makes permanent a higher tax on Medicaid managed care organizations beginning January 1, 2027, following a temporary federal extension earlier this year. Originally enacted three years ago, the tax has generated more than $3 billion to help offset rising Medicaid costs.

The budget restructures the tax into a uniform 0.35 percent assessment on total premium revenue for Medicaid insurers, subject to federal approval. The spending plan also establishes guidelines for how revenues generated from the tax will be invested moving forward.

Long-Term Care Support

The enacted budget restores and enhances several provider reimbursement streams and support programs. Key provisions include:

  • Restoration of a 10 percent hospital capital rate add-on;
  • A 10 percent restoration of nursing home capital rates;
  • Enhanced reimbursement rates for medically fragile children at Elizabeth Seton through April 1, 2029;
  • Extension of enhanced reimbursement rates under the Medical Indemnity Fund through June 1, 2027; and
  • $7 million for long-term care providers.


The Legislature also formally extended the Nursing Home Transition and Diversion (NHTD) waiver program through 2028, as anticipated.



Other Related Items

The budget also preserves healthcare coverage for vulnerable populations while implementing several federal compliance-related reforms.

The enacted budget:

  • Continues Essential Plan coverage for approximately 1.3 million New Yorkers below 200 percent of the Federal Poverty Level;
  • Delays coverage of long-term services and supports under the Essential Plan until 2031;
  • Ensures biomarker testing coverage under Medicaid;
  • Permanently maintains School Based Health services in Medicaid Fee-for-Service; and
  • Preserves benefits for undocumented seniors over age 65 by transitioning coverage to Medicaid Fee-for-Service.
  • 

Public Health and Community-Based Investments


The budget restores or increases funding for numerous public health and community healthcare programs that had faced reductions or elimination under the Executive proposal.


Major public health investments include:

  • $39.3 million for Physician’s Excess Medical Malpractice coverage;
  • $28.5 million for the Medical Indemnity Fund;
  • $10 million for maternal health grants;
  • $10.4 million for opioid addiction harm reduction and patient-centered services; and
  • $14.6 million total for Occupational Health Clinics.


Additional funding was restored or expanded for programs including:

  • School Based Health Centers;
  • Family Planning Services;
  • Nurse Family Partnership;
  • Rural Health Care Access initiatives;
  • Community Health Advocates;
  • Sickle Cell programs;
  • Alzheimer’s support services;
  • LGBTQ health initiatives;
  • HIV/AIDS community programs; and
  • Various food security and health equity organizations statewide.

The Legislature also rejected several Executive proposals to eliminate public health programs.


FAIR Access Next Steps

During the final days of the Legislative Session, lawmakers are expected to focus on several priority issues, including redistricting legislation, before adjourning later next week ahead of the upcoming primary elections. 


This budget cycle has proven to be a Home Care neutral one, as the Governor's office touts its achievements with the PPL implementation and its related declared costs savings. We expect any larger impact items to be back on the table post the 2026 Election season.


FAIR Access Initiative continues its push to advance the Home Care Workforce Modernization and Stabilization Pilot Program, as well as legislation that would codify the State’s “13-hour live-in rule" along with our other agenda items- published here.


Over the coming months, we urge providers to monitor the impacts of the MCO tax and report any discrepancies in outcomes.


Post-session, the FAIR team will also be on the road, meeting with lawmakers in their districts to continue advocating for home care providers and needed policy improvements. 


For questions or concerns about the content of the NYS Budget, please contact our team at Info@fair-access.org.


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