President Trump has signed the “One Big Beautiful Bill Act,” a comprehensive tax and spending plan. The bill drastically cuts spending on Medicaid and SNAP (Supplemental Nutrition Assistance Program), impacting New Yorkers significantly. Some of the changes include canceling federal funding for the Essential Plan under Medicaid, requiring renewal of the Medicaid expansion program every six months, and mandating 80 hours of work, education, or volunteer service per month for adults under 65 to maintain Medicaid coverage.
The “One Big Beautiful Bill Act” reduces funding for Medicaid and the Essential Plan. The Essential Plan, predominantly federally funded, is only available in New York and Minnesota. Similar to Medicaid, it covers low-income individuals below 250% of the poverty line, including U.S. citizens and legal immigrants.
In terms of healthcare under the Essential Plan, the act cuts federal funding for legal immigrants (including green card holders) utilizing the Essential Plan. To maintain current coverage levels, state governments must pay an additional $2.7 billion annually to transfer them to Medicaid. However, American citizens utilizing the Essential Plan are unaffected.
Additionally, around 250,000 immigrants may no longer be eligible for Medicaid renewal due to slightly higher incomes than the qualification standards for Medicaid. They are unable to access alternative plans.
Starting from November 2026, non-exempt adults aged 19 to 64 must meet the requirement of working, studying, or volunteering for 80 hours per month to retain Medicaid eligibility.
The “One Big Beautiful Bill Act” mandates state governments to conduct biannual eligibility reviews for the Medicaid expansion population, beginning on December 31, 2026.
The Medicaid expansion population includes undocumented individuals aged 65 and older who benefit from Medicaid.
State governments must allocate approximately $500 million for implementing a new Essential Plan eligibility review system and reviewing work requirements for individuals under 65 who utilize the Essential Plan.
For able-bodied adults without dependents (ABAWDs) receiving SNAP benefits, the work requirement age range has been expanded from 18-54 to 18-64. They must engage in work, training, or volunteer services for at least 80 hours per month; otherwise, benefits can only be received for a maximum of three months, with the “time limit” being triggered only once within three years.
According to the Fiscal Policy Institute’s analysis, approximately 281,000 adults will immediately lose eligibility for SNAP benefits, with an additional 413,000 individuals at risk of losing benefits due to the stricter work requirements outlined in the bill.
The legislation shifts $2.1 billion in annual federal spending on SNAP to the New York State government, increasing the state’s financial burden.
Concerning tax deductions, the cap on State and Local Taxes (SALT) deductions will increase from $10,000 to $40,000 starting in 2025 for taxpayers with annual incomes not exceeding $500,000 (the deduction eligibility gradually phases out beyond this income threshold).
This new provision will revert to the original $10,000 limit in 2030.
This policy primarily targets service industry workers in the middle to lower income brackets (such as restaurant servers, hair stylists, etc.).
For tip income, starting from 2025, the first $25,000 of tip income will be exempt from federal income tax, with any tip income exceeding this amount subject to taxation. Those earning over $150,000 annually are not eligible for this tax reduction.