More than 1.7 million New Yorkers could lose their health insurance coverage as early as July due to federal funding cuts to the state’s Essential Plan, according to Gov. Kathy Hochul’s administration.
The Essential Plan provides publicly funded health insurance to residents who earn too much to qualify for traditional Medicaid but still need affordable coverage. Edward Roller, a 62-year-old Long Island printing company worker earning $50,000 annually, relies on the program because his employer’s insurance would strain his budget.
“We don’t have any premiums,” Roller said. “We just have copays on the doctors’ visits. The dental is free, too. And so is the vision.”
The program now faces an uncertain future after the Trump administration slashed $7.5 billion in annual federal support—about half the program’s funding, according to a state analysis. The cuts stem from the federal government’s decision to stop funding coverage for certain legally present immigrants who aren’t citizens, a group that makes up about 43% of Essential Plan enrollees, according to an analysis by the Empire Center.
However, New York cannot simply eliminate coverage for these immigrants. Under a long-standing court decision, the state must legally provide the same insurance coverage for lawfully present immigrants as it does for citizens.
Hochul announced her preferred solution in September, which involves reverting to a previous version of the Essential Plan that covers New Yorkers earning up to 200% of the federal poverty level instead of the current 250%. For a family of three, this would lower the annual income limit from $68,300 to $54,640.
Even under this scaled-back approach, 450,000 people would lose Essential Plan coverage by July, according to Hochul’s administration. The proposal would allow the state to use a trust fund linked to the original insurance program to cover costs, at least temporarily.
Advocates for health care consumers, clinics and hospitals support Hochul’s proposal, but it still requires approval from the Trump administration. The uncertainty has left the Essential Plan in limbo as the state budget process moves forward.
State Health Commissioner James McDonald expressed cautious optimism at a state health budget hearing in Albany last week while acknowledging the unpredictable nature of federal decision-making.
“I believe our argument is strong,” McDonald told state lawmakers. “Having said that, I think you’ll all agree with me this government is a little more than unpredictable.”
The U.S. Centers for Medicare and Medicaid Services continues reviewing Hochul’s request, according to agency spokesperson Carolina Fortin-Garcia. She stated that the agency will “ensure federal taxpayer dollars are only used only for individuals who are lawfully eligible for coverage.”
Meanwhile, Hochul’s executive budget released last month includes a contingency plan that McDonald referred to as the “worst-case scenario” at the budget hearing, though details of this backup plan were not fully outlined.
Rose Duhan, president and CEO of the Community Health Care Association of New York State, warned about the potential consequences of coverage loss.
“Probably some folks will get coverage in other places,” Duhan said. “There’s going to be a good chunk of those folks who are uninsured.”
The Essential Plan serves as a crucial safety net for working New Yorkers like Roller, who would otherwise face difficult choices between employer-sponsored insurance with high costs or going without coverage entirely. As state officials scramble to preserve the program, hundreds of thousands of residents await word on whether they will maintain their health insurance coverage beyond July.
