Medicaid Funding Slashes are Being Felt by Buffalo Healthcare System

By Lilly Whitsell

Kaleida Health braces for Medicaid funding slashes that will occur now throughout 2028. Inevitable budget cuts are already being felt by patients throughout the Western New York region.

The “Big Beautiful Bill”, or HR 1, signed into law July 4th, 2025, introduced Medicaid cuts of over 1 trillion dollars that are scheduled to be put into effect from 2026 through 2028. Medicaid is a public health insurance program for low income Americans – over 80 million people rely on this system one way or another. (apaservices.org) Due to this heavy reliance, Medicaid is a major funder for healthcare systems throughout the country. Healthcare systems are going to lose a significant part of this funding when these cuts are enacted – budgets are being slashed in virtually every company nationwide to make up for lost revenue. These slashes are being felt locally, specifically in Buffalo’s own Kaleida Health, which currently provides a wide scope of medical services spanning over 40 locations through the greater WNY area.

In preparation for these cuts, multiple location and service closures were announced in September of 2025. These closures included:
Milliard Fillmore Surgery Center – Outpatient GI and Orthopedic surgeries
Family Planning Center – Outpatient Family Planning
Buffalo Therapy Services at Degraff and Milliard Fillmore Suburban Hospital – Outpatient Physical Therapy and Rehab
Buffalo General Medical ENT Center – Ear, Nose, and Throat Inpatient/Outpatient

As of February 12th of 2026, Buffalo General announced their Medical Rehab Unit would be slashing beds from 34 to 16 as well. 22 staff will be removed from their duties, but they are able to bid on open positions in other departments. (Jon Harris)

According to Don Boyd, President and CEO of Kaleida Health, in an email sent internally to all employees on June 17, 2025 regarding the Bill, “…it is now estimated that the total annual impact… is $165 million due to proposed changes to State Directed Payment Templates in which Oishei [Now Golisano] Children’s Hospital participates.”

In another internal email, sent July 3, 2025, Don Boyd says that “Kaleida Health will be forced to make difficult decisions regarding potential cuts, elimination of services and even staff reductions.”

I spoke with a nurse that works for Kaleida who wished to remain anonymous. They said that staff ratios at the bedside are being affected as well. Jobs are sitting vacant at an alarming rate, bonus is no longer being offered when picking up shifts unless it is a weekend. The incentives to pick up shifts to compensate for staffing issues are virtually non-existent already. Nurses are understaffed and overworked as it is, and this problem will become significantly worse when funding is officially cut.

Currently, a Medical Emergency Center is not able to turn away a patient in need of immediate help if they are unable to pay. When they provide care, they receive a stipend from

medicaid to compensate for the patient’s bills. If Medicaid no longer exists, patients will be turned away because hospitals will be losing money at an unsustainable rate. The loss of funding is a slippery slope, and the effects are already being felt in Buffalo.