Rural New York's health care crisis deepens amid federal funding battle

ALBANY, N.Y. (NEXSTAR) — Comptroller Thomas DiNapoli released an audit on Aug. 7 detailing health care staffing shortages in 16 rural counties across New York.

The report found the state lacking in primary care doctors, pediatricians, OB-GYNs, dentists and mental health professionals.

According to DiNapoli's office, they conducted the system-wide analysis following roundtable discussions in the Hudson Valley and Finger Lakes, where health care access represents a major concern. Per the report, which you can read at the bottom of this story, several counties do not have access to a variety of specialty medical providers.

On average, the 16 rural counties examined — Allegany, Cattaraugus, Chenango, Delaware, Essex, Franklin, Greene, Hamilton, Herkimer, Lewis, Schuyler, Steuben, Sullivan, Washington, Wyoming, and Yates — had just four primary care physicians for every 10,000 people. That's less than half the statewide ratio of 8.1 and further still below the national average of 8.4.

And that disparity gets worse in designated "primary care health professional shortage areas," where nearly 173,000 New Yorkers live. In those regions, it's down to just 0.12 physicians per 10,000.

The 16 rural counties have just 0.5 pediatricians for every 10,000 people, less than a fifth of the state ratio of 2.8. Chenango, Schuyler, and Yates Counties have no pediatricians at all, per the audit.

The ratio of obstetrician-gynecologists is 0.4 per 10,000, translating to about one for every 23,000 people. Hamilton, Herkimer, Schuyler, and Yates Counties have no OB-GYNs.

For dentists, these rural counties had 3.6 per 10,000 people, below half of the state's ratio of 8.3. Ten of the 16 counties have dental primary care health professional shortage areas for those eligible for Medicaid, which includes 134,248 people. And according to the comptroller, Hamilton County has no dentists at all.

The audit determined a ratio of 6.9 mental health practitioners per 10,000 people in rural New York. The ratio for the entire state, meanwhile, is 16.1. All 16 counties are mental health primary care health professional shortage areas, either for the entire population or specific groups, like the Medicaid-eligible population. That means that almost 41 percent of the population in these counties — over 305,265 New Yorkers — are considered underserved in mental health care.

The audit also reported a lack of physician assistants (PAs) and nurse practitioners, positions meant to address doctor shortages in the 1960s. These professionals now deliver as many as 25 percent of health visits in the U.S. The ratio of PAs per 10,000 people in the rural counties is 4.2, less than half of the state ratio, 9.2. NPs are also lower, at 10.5 per 10,000 compared to the state's 16.4.

The comptroller audit, which built on a 2023 comptroller report about rural New York, found that many of these areas struggle with population loss, an aging population, and decreases in the labor force. Low population densities and limited public transportation mean that people have to spend to maintain personal vehicles to access health care.

The report recommends creating mobile clinics and school-based health centers to increase access to care, alongside expanded transportation and telemedicine programs. It also suggests offering loan forgiveness and stipends to new healthcare professionals in rural areas and creating educational opportunities for nursing staff to advance their degrees and bolster the workforce. And it proposes that four-year SUNY schools offer satellite programs at local community colleges that blend online and in-person coursework.

The federal government has a huge impact on rural hospitals. A new federal law — Public Law No. 119-21, or the One Big Beautiful Bill (OBBB) — earmarks $50 billion from 2026 to 2030 for a Rural Hospital Transformation Program, but it's not guaranteed to offer funding to all states. According to the American Hospital Association, the law would reduce federal Medicaid spending on New York's rural hospitals by $1.125 billion over 10 years.

And that law also reduces eligibility for Medicaid and the Essential Plan, which is likely to worsen the situation for rural hospitals operating on narrow profit margins. That's because they need Medicaid funding to stay open.

The law also enacts new student loan limits of $50,000 annually for professional students and an aggregate limit of $200,000. This would make it harder for proposed loan forgiveness programs to attract any new doctors to rural New York.

An April 2025 analysis from the Center for American Progress found that federal funding cuts to Medicaid threaten these hospitals across the country. They determined that close to a third of those in New York would be at immediate risk of closing.

The numbers from another April analysis, this from the Center for Healthcare Quality and Payment Reform, were broadly aligned in finding that close to 200 rural hospitals in 34 Medicaid expansion states were already at immediate risk of closing because of financial instability.

In New York, they found that over a third of rural hospitals were at risk of immediate closure. They also counted three having closed since 2015, and 62 percent of the state's rural hospitals reported financial losses in 2023-2024, even with Medicaid funding intact.

According to the U.S. Government Accountability Office (GAO), rural hospitals survive best in states that increase Medicaid enrollment and eligibility. New York has six rural hospitals in the top 10 percent nationwide for their Medicaid payer mix, and five more have had negative margins for three consecutive years. In the 16 rural counties examined, 27 percent of the population was on Medicaid as of May 2025. That's close to 205,000 people.

The Healthcare Association of New York State (HANYS) and the Greater New York Hospital Association (GNYHA) have opposed the OBBB. In letters sent to New York's congressional delegation in May, both organizations warned of the bill's catastrophic impact on the state's healthcare infrastructure. HANYS stated that the bill would cost the Empire State almost $13.5 billion per year. GNYHA also argued that the bill's cuts would be unsustainable for the state and wreck its hospital system.

A June analysis from the Fiscal Policy Institute found that hospitals at immediate risk for closure in New York get over 25 percent of their net patient revenue from Medicaid or other government appropriations. They also reported that 94 hospitals in the state would see their annual profits disappear altogether with just a 10 percent cut to Medicaid revenue, because the program already pays less than half of what commercial insurance pays for the same services.

According to the Fiscal Policy Institute, two Republican lawmakers who voted for the bill, Reps. Nicholas Langworthy and Elise Stefanik, represent districts with some of the highest numbers of at-risk hospitals. Eight are in Langworthy's, and seven in Stefanik's.

In fact, five Republican members of the state's congressional delegation— including Stefanik and Langworthy —even published a letter in June on the topic. While they said they support OBBB's "intent to prioritize federal benefits for citizens and long-term residents," they asked to delay the implementation of two sections. They argued that states and healthcare providers avoid "drastically disruptive consequences" for the healthcare system with a less abrupt transition.

Their letter asked for sections 112101 and 112102, modifying tax credit eligibility for certain lawful immigrants, to not take effect until January 2029.

The law would force 500,000 immigrant New Yorkers who live here legally onto state-only Medicaid — because New York is constitutionally required to provide coverage—with state and county taxpayers footing the bill. This could cause "unsustainable spikes in uncompensated costs" for local health services and destabilize the state's Essential Plan, they warned.

Take a look at the comptroller's report below: