Notice of Insurance Program Cuts for New Yorkers

A notice was released Wednesday, stating that around 450,000 New Yorkers will be dropped from the Essential Plan, a public insurance program, due to cuts in federal funding happening this July.

Those losing their coverage can, of course, look to purchase a replacement. However, experts caution that the plans available in the state’s online marketplace could become really expensive.

Yet, there may be some relief in sight.

State Senator Gustavo Rivera and Representative Amy Paulin have introduced a bill aimed at implementing temporary measures to help those affected by the Essential Plan shifts and other federal healthcare cuts avoid losing coverage.

This proposal has garnered support from community health activists, who are advocating for it in Albany. However, for it to be included in the state budget, prompt action is necessary, and it’s worth noting that Governor Kathy Hochul has not yet shown her support for it.

The national budget was supposed to be finalized on Wednesday, but Hochul mentioned that the deadline has been pushed back to next week.

In response to the loss of about $7.5 billion in federal funding for the program, Hochul plans to tighten income eligibility for the Essential Plan and use a trust fund to help cover the remaining costs.

These federal cuts were part of a significant domestic policy bill, which President Donald Trump pushed through the Republican-led Congress last year and aimed at reducing payments for certain legally present immigrants.

Hochul’s team claims this approach will cover most of the 1.7 million people enrolled in the Essential Plan.

Still, consumer advocates argue that better solutions are possible.

“New York State has been a leader in expanding coverage and ensuring that everyone can access life-saving medical care. It’s vital for the state to keep that momentum,” said Becca Terzak, vice president of the immigrant rights nonprofit Make the Road.

The bill proposed by Rivera and Paulin looks to fund the existing eligibility under the Essential Plan with state resources and restore financial help for immigrants who will lose federal subsidies for health insurance under the Affordable Care Act next year.

Initially, the New York Social Service Association, which contributed to the proposal, estimated it would cost the state about $2.3 billion annually. However, supporters now suggest that depending on how the implementation unfolds, it could be under $1 billion a year.

Elizabeth Benjamin, director of health policy initiatives at the Community Services Association, mentioned that states could consider raising the monthly payment for consumers on the Essential Plan from $0 to $50 or reducing the reimbursement rates for healthcare providers under this plan, which are considerably higher than those for Medicaid.

Rivera pointed out that Hochul had set aside over $2 billion earlier this year, anticipating that the Trump administration might not agree to the proposed lower income limits for the Essential Plan. In that case, while the Essential Plan could have faced elimination, state law would still require New York to support certain groups of immigrants through Medicaid funded solely by the state.

He noted that those funds set aside for a “worst-case scenario” could be redirected to close the gaps in coverage.

But Michael Kinukan, who oversees health policy at the Fiscal Policy Institute, argued that Hochul no longer has a legal obligation to provide that funding.

“We have a moral obligation, but no legal duty,” Kinukan stated regarding filling the remaining gaps in coverage.

Hochul’s office didn’t respond to a request for comment about supporting funding in the budget to protect those at risk of losing their insurance.

“I have consistently raised concerns about the significant impact that HR1 would have on our hospitals and healthcare systems. No state can fully compensate for these drastic cuts,” Hochul said in a statement on Wednesday regarding the federal law that enacted the funding reductions.

She added, “My administration is committed to helping those affected find the most affordable coverage available.”