New York's Top Addiction Official Warns $13 Billion Medicaid Cut Could 'Destabilize' Treatment System Statewide

New York's addiction treatment system could be headed for a crisis that officials say would erase years of progress against overdose deaths. The warning came not from an advocacy group or industry lobby, but from the state's own top addiction official.

Speaking at a University of Pennsylvania conference on March 25th, Chinazo Cunningham—Commissioner of the New York State Office of Addiction Services and Supports—told researchers and policymakers that proposed federal Medicaid cuts would force her agency into decisions that "may ultimately cost lives."

"If these cuts happen and people lose access to treatment, I don't see how we wouldn't see an increase in overdose deaths," Cunningham said during a keynote interview at the Penn Leonard Davis Institute event organized with the research collaborative CHERISH.

The numbers behind her alarm: New York stands to lose $13 billion in Medicaid funding under the Trump administration's "One Big Beautiful Bill," the largest rollback of federal Medicaid spending in the program's history. Nationwide, the legislation would cut roughly $1 trillion over ten years and push an estimated 10 to 12 million people off coverage.

For addiction treatment specifically, the Center for American Progress estimates that 1.6 million Medicaid enrollees currently in substance use disorder programs would lose their coverage—and with it, access to medication-assisted treatment, counseling, outpatient care, and residential programs. In New York alone, 166,500 people receiving addiction treatment through Medicaid would be cut.

"There's No State That's Going to Make Up $13 Billion"

Cunningham's comments mark a rare public acknowledgment from a state official of just how unprepared governments are to absorb these losses. "There's no state that's going to make up $13 billion somewhere," she said. "That's just not going to happen."

The funding shortfall comes at a particularly bad time for New York. The state recently reported a 32 percent drop in overdose deaths—the lowest toll since before COVID—driven in part by expanded access to naloxone, mobile medication units, and harm reduction programs. Those gains now appear fragile.

Medicaid is the backbone of addiction care across the United States, covering nearly half of all adults with substance use disorder and serving as the single largest payer for treatment in most states. In New York, the program doesn't just fund treatment—it sustains the entire infrastructure. State-supported providers cannot turn patients away for lack of insurance, meaning clinics must find ways to continue treating people even as reimbursements evaporate.

"Our number one priority is stabilizing the system so programs remain viable," Cunningham said. She also noted the difficulty of planning when "communication from the federal government has been anything but clear," citing frequently shifting announcements and "late-night" notices about funding changes.

"Everybody's Going to Feel the Pain"

As losses materialize, Cunningham said officials may be forced to choose which parts of the system—prevention, treatment, harm reduction, and recovery—to protect. "The resources may not be enough to sustain them equally," she explained. "It's like your children are fighting: 'I love all of you—but we may have to make very difficult decisions.'"

Those decisions, she said, will likely prioritize communities at highest risk of overdose, leaving other areas with diminished services. "If treatment funding is cut, we have a finite amount of dollars. We're going to have to take those dollars from somewhere. Everybody's going to feel the pain."

The conference moderator, Dan Gorenstein—executive producer of the influential Tradeoffs Podcast and an Adjunct Senior Fellow at Penn LDI—asked Cunningham whether New York was considering using opioid settlement funds to backfill the Medicaid losses.

The pharmaceutical industry is paying out $50 billion over about 15 years to states and local governments as part of settlements resolving thousands of lawsuits over their role in fueling the opioid crisis. In New York, those funds are overseen by an Opioid Settlement Fund Advisory Board and are intended for public health purposes—not general budget relief.

"At one of our Advisory Board meetings, this issue was discussed quite robustly," Cunningham said. "There were many advisory board members who felt the funds should be used to cover Medicaid cuts, but others felt they shouldn't be used. There was no consensus on the board, so they didn't make a recommendation to the state."

Translation: settlement dollars won't save the system, and even if they could, there's no agreement on whether they should.

Simulation Models Predict 30-35% Spike in Overdose Deaths

The Penn conference also featured new research quantifying what happens when Medicaid-funded addiction treatment disappears. Benjamin Linas, an infectious disease physician and researcher at Boston University, presented simulation modeling that forecasts a 30 to 35 percent increase in overdose deaths if the proposed cuts go through.

"Loss of Medicaid coverage leads to loss of access to treatments, which then leads to an increased risk of overdose death," Linas explained. His model tracks how coverage losses ripple through access to methadone, buprenorphine, and other medications known to reduce mortality by as much as 50 percent.

The findings suggest that even under best-case scenarios—where states streamline eligibility verification and minimize administrative burden—overdose deaths would still rise significantly. "That looks like giving back all the progress [in reducing overdose fatalities] in one fell swoop," Linas said.

Worse, the model found that total health system costs would increase, not decrease, as people lose coverage. While Medicaid spending might drop, those individuals still require care—shifting costs to hospitals, uncompensated care pools, and emergency departments.

"We're going to pay for that outcome because costs are going up, not down," Linas said.

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Medicaid Work Requirements Add Another Layer of Risk

Beyond funding cuts, the new legislation also introduces Medicaid work requirements: most adults enrolled through expansion must complete at least 80 hours per month of work or qualifying activities to maintain coverage. While exemptions exist for people with substance use disorder, conference panelists warned that eligibility on paper doesn't guarantee protection in practice.

"The dominant outcome we've seen is coverage loss," said Kristen Underhill, a Cornell University law professor who studied prior state experiments with work requirements. In Arkansas—the only state to fully implement and enforce such rules—more than 18,000 people lost coverage in a single year. Many were already working or qualified for exemptions but failed to navigate the reporting process.

For people with substance use disorder, the administrative burden can be overwhelming. Medicaid recipients must now reestablish eligibility every six months instead of annually, often requiring documentation of income, work status, or medical exemptions. Even those who follow the rules can fall through the cracks.

"People who are eligible and doing everything right are still going to lose coverage," said Lydia Gottesfeld, managing attorney at Community Legal Services of Philadelphia. She described scenarios where patients receive renewal paperwork days before a deadline, scramble to gather documents, and ultimately lose coverage because forms are incomplete or processing is delayed.

The condition itself—substance use disorder—makes it difficult to manage paperwork, track deadlines, or navigate bureaucratic systems. Research presented by Christina Andrews, a health policy professor at the University of South Carolina, shows that even modest administrative burdens reduce Medicaid enrollment, and people with SUD are particularly vulnerable.

Meanwhile, new copay requirements—though they exempt addiction treatment directly—may create indirect barriers. Patients may avoid routine medical visits that could otherwise serve as entry points into care. "We don't want to close doors that could be pathways into care," Andrews said.

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What Happens Next

Some provisions of the Big Beautiful Bill begin taking effect in late 2026, but the largest coverage losses are expected to start in January 2027. States have limited time to prepare, and federal guidance has been inconsistent.

Louisiana officials say they are designing systems to minimize coverage loss by relying heavily on existing data—such as diagnosis codes and pharmacy claims—and allowing simple self-attestation for exemptions. "When in doubt, we err on the side of exemption," said Pete Croughan, Deputy Secretary of the Louisiana Department of Public Health.

But many states face tight timelines and outdated data systems. Experts warn that individuals not captured in existing databases—such as those in rural areas or outside formal treatment systems—may be especially at risk.

For New York, the path forward is unclear. Cunningham's warning at Penn suggests the state is bracing for impact rather than plotting a workaround. The question now is whether federal lawmakers will adjust the legislation before the damage becomes irreversible—or whether the nation's addiction treatment system will absorb another crisis just as it was starting to recover from the last one.

If you or someone you know is struggling with substance use, call the NYS OASAS HOPEline at 1-877-8-HOPENY (1-877-846-7369) or visit FindAddictionTreatment.ny.gov to locate services near you.