17,632 Westchester residents will loose coverage if action is not taken
By Dan Murphy
Two NY Government watchdogs have written about the upcoming decision by NYS Government and Governor Kathy Hochul to scale back New York’s Essential Health Plan, which provides health care to 1.9 Million New Yorkers.
One story, written by the Fiscal Policy Institue, summarizes the issue, and we agree with their call to have the Governor and the State Legislator take action, so that 470,000 current enrollies, including 17,632 in Westchester, don’t loose their coverage.
By Fiscal Policy Institute (https://fiscalpolicy.org/statement-on-federal-approval-to-shrink-the-essential-plan)
On March 20, 2026, New York received final federal approval for Governor Kathy Hochul’s request to shrink the Essential Plan by lowering eligibility from 250 percent to 200 percent of the Federal Poverty Line. This proposal will allow New York to maintain Essential Plan coverage for 1.3 million New Yorkers earning less than 200 percent of the poverty line—but unless the State takes immediate action it will also strip coverage for 470,000 enrollees earning above that amount, beginning in July 2026.
New York has ample resources to provide alternative coverage to this population. In her Fiscal Year 2027 executive budget proposal, Governor Hochul set aside approximately $2.5 billion in FY27 and $3.5 billion in future years to provide Medicaid coverage to some Essential Plan enrollees if the State did not receive federal approval for its request to maintain the Essential Plan. Now that the State has received federal approval these funds are no longer needed for that purpose. The State can and should use this newly available $2.5 billion to protect coverage for those threatened with loss of the Essential Plan. Past work by FPI has shown that this sum is more than sufficient, and a recent report by the Community Service Society demonstrates that the State could cover all affected populations for $2.4 billion.
Previous work from FPI has shown that the impact of Essential Plan loss would be felt statewide: 233,000 New York City residents are set to lose coverage in July alongside 70,000 Long Islanders, 47,000 residents of the Hudson Valley, 26,000 people in Western New York, and tens of thousands of others across the state.
Following the announcement of federal approval, Fiscal Policy Institute Health Policy Director Michael Kinnucan released the following statement:
“Now that Governor Hochul’s request to shrink the Essential Plan has received federal approval, half a million New Yorkers are four months away from losing their health insurance. This coverage cliff represents the largest and most rapid loss of access to healthcare in New York’s history and would have catastrophic consequences for our state’s healthcare system. The legislature must act to use existing financial plan resources or new revenue to protect New Yorkers’ healthcare.”
A total of 59,254 Westchester residents are currently enrolled in the Essential Plan. We agree with the FPI that funding should be provided to help these New Yorkers keep their Essential Plan coverage and subsidy.
Another organization that we enjoy reading is EmpireCenter.org. Bill Hammond from the Empire Center, also outlined the matter at hand with the Essential Plan. He writes,
The Bottom Line of Hochul’s Essential Plan Overhaul
By Bill Hammond (https://www.empirecenter.org/publications/the-bottom-line-of-hochuls-essential-plan-overhaul/)
Now that New York has won partial federal approval for overhauling its Essential Plan, it’s worth being clear about what the state is doing and why.
The redesign sought by Governor Hochul is not primarily about “preserving coverage,” as she has said, but about saving money for the state budget.
Nor was the change truly forced upon New York by Washington. State officials are making a policy choice in response to diminished federal aid.
Also, the portion of enrollees who stand to be displaced – provided they have citizenship – are not losing access to government-subsidized coverage. They still qualify for tax credits under the Affordable Care Act, which would absorb two-thirds or more of their premiums.
Launched in 2015, the Essential Plan offers zero-premium, government-financed health coverage for New Yorkers just above the income cutoff for Medicaid. It was organized under an optional provision of the ACA that has been exercised by only three other states: Minnesota, Oregon and Washington.
Participating states are to collect federal aid equal to 95 percent of the tax credits that enrollees otherwise would have received if they bought insurance through an ACA exchange. That formula unexpectedly generated more money than the state needed, causing a multi-billion-dollar surplus to accumulate in the program’s trust fund.
New York took advantage of that extra funding to subsidize hospitals – by boosting the plan’s hospital fees to 225 percent of the Medicaid amount. In 2024, the Hochul administration also obtained a waiver lifting the eligibility cap from 200 percent to 250 percent of the federal poverty level.
With zero premiums and low copayments, the plan has grown to cover 1.7 million people, or almost 9 percent of the state’s population.
The program’s financial outlook changed dramatically with last summer’s federal budget legislation, known as the One Big Beautiful Bill Act or H.R. 1. That bill barred nearly all immigrants, including those who are legally present, from participating in most federal health programs.
Legally present immigrants account for about 43 percent of the Essential Plan’s enrollment and 55 percent of its funding. Their share of funding is disproportionately high because 500,000 of them have incomes below 138 percent of the poverty level, meaning they draw the maximum amount of federal aid.
This is the so-called Aliessa population, named for 2001 court ruling in Aliessa v. Novello that requires New York to provide Medicaid coverage for legally present immigrants regardless of whether federal support is available. The state had been bearing the full cost of this care, but the ACA made it possible for them to shift the Aliessa group into the Essential Plan at federal expense.
With the passage of H.R. 1 last summer, New York faced the prospect of moving the Aliessa group back to Medicaid, which officials have said would cost the state an estimated $3 billion per year.
Then the Hochul administration came up with an alternate plan: The state would cancel the 2024 expansion waiver and revert to its original program design. Officials said this would allow them to keep the Aliessa population in the Essential Plan and tap into a $9 billion surplus to pay for their coverage – but only for two or three years, when that surplus would run out.
At the same time, this plan would also mean displacing some 470,000 enrollees above 200 percent of the poverty level.
On Wednesday, the Health Department told Politico that it had received partial approval for the plan from the Centers for Medicare & Medicaid Services
The governor has framed plan as something the state was forced to do “to preserve coverage for as many New Yorkers as possible.” Yet federal law still allows New York to continue the Essential Plan in its expanded form for enrollees who are citizens – and still provides funding for those enrollees according to the original formula.
The issue appears to be money: Officials have said the state cannot afford to continue the current Essential Plan new rules, which exclude immigrant enrollees and the revenue they generate.
However, officials have never spelled out how much the status-quo option would cost, how much federal aid it would draw, and how much additional money, if any, the state would have to provide to fill the gap. Neither have they released the projected expenses and revenues for the overhaul plan pending approval in Washington. Instead, the governor’s January budget proposal assumes the Essential Plan will shut down completely in July of this year.
According to the state’s early analysis of H.R. 1, the Essential Plan is losing 730,000 immigrant enrollees and $7.5 billion in yearly funding. That would leave 970,000 citizen enrollees and $6.2 billion in funding – about $6,400 per person, or 79 percent of the program’s current funding level.
If the Hochul administration wanted to preserve coverage for enrollees above 200 percent of poverty, it could either find ways to cut costs – by rolling back the elevated hospital fees, for example – or allocate supplemental funds in the state budget. The amount necessary to preserve current spending levels would be roughly $2 billion.
That said, rolling back the 2024 expansion is hardly a draconian step. The affected population, with incomes from 200 percent to 250 percent of poverty, would still be eligible for subsidized coverage through the state’s ACA insurance exchange, the New York State of Health. As seen in the table below, they would be eligible for tax credits that would cover from 67 percent to 80 percent of the cost of benchmark silver-level coverage.
Individual enrollees would be responsible for paying the remaining one-fifth to one-third of their premiums, which would amount to thousands of dollars a year – a not insignificant bite for someone with a modest income.
However, asking people in this income range to pay a share of their own coverage costs has been part of the structure of the ACA from the beginning. It’s the norm in 49 other states – and it was the norm in New York until two years ago.” writes Hammond.
While Hammond is correct is his analysis, that New Yorkers earning between $32,000 and $40,000 would loose their subsidy, we would hope that the Governor and the Legislature can find the funding to keep the subsidy for those earning what is certainly a salary that makes it difficult for them to pay for and keep their existing health insurance.
This reporter knows New Yorkers who will be affected by this cut to their subsidy and coverage. Do you know of anyone is Westchester facing the same?
