New York has gotten permission to undo a health insurance expansion in response to federal funding cuts, a move that will end nearly free health care for 460,000 low-income New Yorkers as of July 1.
The state opted to absorb the cuts by rolling back eligibility for its Essential Plan, a federally funded program that provides coverage with no premiums and some co-pays for almost 1.7 million New Yorkers. Enrollment had jumped after state officials raised the income cutoff in 2024.
Now, they are restoring the original limit, which will disqualify all those who earn more. Gov. Kathy Hochul announced the Trump administration's final approval for that change on March 20, blaming federal cuts for the reversal while saying it will protect care for 1.3 million people still enrolled in the Essential Plan.
"Because Republicans used their majority to pass the largest health care cuts in history, hundreds of thousands of New Yorkers are still facing painful decisions about whether they can afford coverage, and no state can fully backfill these draconian cuts," Hochul said in a statement.
The governor was in Washington, D.C., on March 20 to discuss the Essential Plan and Medicaid with Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services. Speaking to reporters on Monday, March 23, Hochul said one issue she and her staff are exploring is a potential accommodation for those losing their Essential Plan coverage.
"I can tell you, it's very much top of mind for us," she said.
What prompted the Essential Plan change?
New York got approval from the prior Biden administration to expand eligibility for the Essential Plan, which covers working New Yorkers who earn too much to qualify for Medicaid and aren't insured through their employers. The Essential Plan's limit rose from 200% of the federal poverty level to 250% of the poverty level, which as of last year equated to $39,000 for an individual and $67,000 for a family of three.
Enrollment surged as a result, adding about 380,000 people in that expanded income range by the end of 2024, state data shows. That number has grown to just over 460,000 as of March 1.
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What caused the state to reconsider was the "big, beautiful bill," the package of tax and spending cuts that Republicans in Congress and PresidentDonald Trumpenacted last year. Among the law's litany of policy changes was a ban on health care funding for immigrants who are legally present in the U.S. but not citizens. New York officials said that rule would sap the Essential Plan by $7.5 billion a year.
The state initially considered shifting those immigrants to state-funded Medicaid coverage, at a cost of about $2.7 billion a year. But it announced last September that it would instead reverse its program expansion.
Are there other plans for those losing health coverage in NY?
Enrollees earning more than 200% of the poverty level will lose Essential Plan coverage as of July 1. What is available to them then is private health coverage through the state-run marketplace set up under the Affordable Care Act, the 2010 federal law better known as Obamacare.
The state Department of Health announced Monday, March 23, that it will notify those disqualified enrollees and explain their coverage options on April 1.
"Our priority is to ensure New Yorkers continue to have access to affordable, high-quality coverage," Dr. James McDonald, the state health commissioner, said in a statement.
An analysis this month by the Empire Center for Public Policyconcluded that New Yorkers in the disqualified income range would be eligible for federal subsidies that cover 67% to 80% of their premiums. That would result in annual premiums of roughly $2,000 to $3,200, according to that report by Bill Hammond, the Empire Center's senior fellow for health policy.
But state officials noted other potential costs in Monday's statement, saying those customers may "face deductibles of thousands of dollars before coverage kicks in."
Chris McKenna covers government and politics for The Journal News and USA TODAY Network. Reach him atCMcKenna@usatodayco.com.
This article originally appeared on Rockland/Westchester Journal News:NY health coverage ending for 460K due to federal cuts. What to know