Changes to New York's Essential Plan receive final approval

The U.S. government has officially signed off on changes to New York's no-cost health-insurance option for low-income residents, though nearly 500,000 state residents are still expected to lose their benefits.

Gov. Kathy Hochul announced last week the Centers for Medicare & Medicaid Services approved the state's plan to preserve health insurance for 1.3 million New Yorkers currently enrolled in the Essential Plan, a no-cost option for individuals between the ages of 19 and 64 who do not receive health insurance through employment and earn too much to qualify for Medicaid.

Hochul announced the approval following a meeting Friday with Dr. Mehmet Oz, the CMS administrator.

But around 450,000 people who gained coverage when income-eligibility requirements for the Essential Plan were expanded from 200% of the federal poverty level to 250% back in 2024 are expected to lose their insurance when the changes take effect July 1, including thousands in the Capital Region and North Country.

Those who lose coverage under the changes will be eligible to purchase insurance on the open market, though they would face monthly premiums and thousands of dollars in deductibles.

The news comes just months after Congress could not reach a deal to extend enhanced premiums that expired last year. The premiums helped lower costs for thousands who purchased their insurance through government-run exchanges created as part of the federal Affordable Care Act.

The state is expected to notify those affected by the changes by April 1.

Changes to the Essential Plan were first announced last year following the passage of the federal One Big Beautiful Bill Act, which included steep health-care cuts, including nearly $1 trillion from the Medicaid program over the next decade.

Proponents of the legislation, including President Donald Trump, have said the cuts are necessary to root out waste, fraud and abuse. But those opposed argue the cuts will leave millions uninsured and place further strain on hospitals that are expected to see an increase in uninsured patients seeking treatment at emergency rooms, resulting in greater rates of uncompensated care.

The legislation also slashed $7.5 billion from the state's Essential Plan. The cuts, which amount to about half of the program's cost, relate to a provision of the law that prohibits public insurance to noncitizens.

New York has long provided insurance for qualifying immigrants with legal standing because of a 2001 state Court of Appeals ruling that determined New York had an obligation to do so under the state constitution.

For years, those individuals — including green-card holders and those in the asylum process — were insured through the state's Medicaid program, but were switched over the federally-funded Essential Plan created through the Affordable Care Act. More than 700,000 lawfully present immigrants receive insurance through the Essential Plan.

In a bid to preserve insurance for as many as possible, New York applied to revert back to the plan's original income limits of 200% of the federal poverty level. The plan was partially approved earlier this month.

Hochul announced the full approval following a meeting with Oz, where the two discussed efforts to root out fraud in the state's more than $90 billion Medicaid program after Oz announced the program was under scrutiny for potential abuse earlier this month.

In a pair of statements released following the meeting, Hochul said the state remains committed to eliminating fraud, but emphasized that actions on the federal level jeopardize the health of New Yorkers.

"Even when Washington falls short, I'm going to keep doing everything I can to protect families, strengthen our health care system and make sure every New Yorker gets the care they need," Hochul said.