The likely impact of federal health-care cutbacks has diminished in recent days as House Republican leaders backed away from some of their bigger-ticket proposals, reducing the estimated savings to $625 billion from previous figures of $715 billion and $880 billion.

The plan also lost a preliminary vote in the Budget Committee on Friday, raising new doubt about its ultimate passage as both moderate and hard-line Republicans raise objections.

Still, New York’s big-spending Medicaid program potentially stands to lose billions if the package does go through.

Here is an updated summary of key provisions in the House plan and how they would affect New York.

Limiting health tax credits for non-citizens

The tax policy portions of the House GOP plan would reduce the number of non-citizens who qualify for health insurance tax credits through the Affordable Care Act. 

Under current law, a range of legally present immigrants are eligible for tax credits that offset the cost of so-called Obamacare plans purchased through insurance exchanges.

Under the House plan, eligibility would be limited to people who entered the U.S. legally with green cards as well as immigrants from certain countries, including Cuba, Micronesia, the Marshall Islands and Palau.

The main fallout for New York would involve the Essential Plan, which receives federal funding equal to 95 percent of the ACA tax credits its enrollees would otherwise receive.

That funding amounts to $13.2 billion, which covers the full cost of insuring 1.7 million people. Non-citizens account for 30 percent of its enrollment – which implies that they represent roughly $4 billion of its revenue. 

Some would continue to be eligible under the House plan while others would not – making its impact difficult to gauge. Crain’s New York reported that New York stands to lose $2.8 billion annually.

That said, Essential Plan spending has more than doubled over the past three years – mostly state officials sought to direct surplus funds to various health-care constituencies, primarily hospitals.

If per-enrollee spending could be reduced to its 2023 level, the program would save $5 billion – more than enough to cover the lost aid.

Penalizing state-funded immigrant coverage

A provision of House plan would also penalize states for providing coverage to immigrants through other state-operated health plans.

States are already barred from using federal Medicaid funds for illegal immigrants as well as a portion of legal immigrants – such as green-card holders who have been in the country for less than five years.

This new provision aims to discourage states from covering those immigrants with their own funds – one of them being New York. Its Child Health Plus program is open to all residents regardless of immigration status. And as of last year, its Medicaid program was broadened to cover low-income immigrants over 65 years old.

Under the House plan, states who cover undocumented immigrants would receive less federal aid for their Medicaid “expansion” enrollees, meaning able-bodied recipients between 19 and 64. The federal government would pay 80 percent of their coverage expenses instead of the standard rate of 90 percent.

In New York’s case, that would equate to between $1 billion and $2 billion in lost funding, the equivalent of 1.6 percent of New York’s current spending on Medicaid (which is increasing by $8 billion this year alone). It seems unlikely that a penalty on that scale would compel state lawmakers to scale back immigrant coverage.

Imposing work requirements

One of the highest-profile provisions of the House GOP plan would require states to impose work requirements on a portion of their Medicaid recipients.

In order to receive benefits, non-disabled enrollees between 19 and 64 would have to show that they engaged in paid work, community service or an education program for at least 80 hours per month.

State officials told the Journal News that most of the state’s 7 million enrollees are either exempt or already employed, leaving between 500,000 to 750,000 vulnerable to losing benefits.

However, the current draft of the House bill postpones the effective date of this mandate to January 2029 – which is two congressional elections and one presidential election away. That raises the possibility that the work requirement would be repealed before it took effect.

Lifting the SALT cap

Another piece of the House budget plan would lift the so-called SALT cap – a limit on the federal tax deduction for state and local taxes – from $10,000 to $30,000.

The current cap was imposed as part of President Trump’s tax cut package of 2017, which also reduced tax rates, increased the standard deduction and rolled back the alternative minimum tax.

New York was particularly affected by the SALT cap because it has the highest state and local tax burden in the U.S. Most of its residents saved on their federal taxes as a result of the 2017 law, but their benefit was proportionally smaller than elsewhere.

The cap has also diminished the state’s competitiveness. The deductibility of state and local taxes previously mitigated the impact of its high tax rates, especially for people at the top of the income scale. With the advent of the SALT cap, the state’s highest-in-the-nation marginal income tax rate has become more of an incentive for wealthier residents to move elsewhere. State lawmakers accentuated that effect by hiking the top marginal rate in 2021 and then extending that temporary hike by five additional years, through 2032, as part of this year’s budget. 

Republican members of the state House delegation have been pushing to eliminate the cap as part of this year’s budget bill – and rejected the increase to $30,000 as inadequate. Two members – Nick LaLota of Long Island and Michael Lawler of Rockland County – have threatened to vote against the package over this issue, which could be enough to block passage given the Republicans’ narrow majority in the House.