Changes to NY's Essential Plan still pending

New York is continuing to hammer out plans to provide affordable health insurance to more than 400,000 low- and moderate-income residents slated to lose coverage due to federal health care cuts approved last year.

At the center of the issue is the state's Essential Plan, a no-cost insurance option created through the Affordable Care Act in 2016 for New Yorkers who do not receive health coverage through employment and have income levels too high to qualify for Medicaid.

More than 1.7 million people are enrolled in the program, which for years was available to New Yorkers - including lawfully present immigrants - between the ages of 19 and 64 who earned up to 200% of the federal poverty level. The program was expanded to cover those earning up to 250% of the federal poverty level in 2024 after the state gained federal approval and additional funding.

The expanded eligibility made the Essential Plan available to hundreds of thousands more New Yorkers and was praised by state and federal officials at the time, who touted the program as an example of how the state was driving down the uninsured rate and addressing affordability.

Those enrolled in the plan save an average of $6,000 on insurance premiums annually, according to the state.

But funding cuts approved in the One Big Beautiful Bill Act approved by Republicans in Congress and signed into law by President Donald Trump last summer slashed $7.5 billion in annual funding from the program, essentially upending the Essential Plan.

At issue is a provision in the law that prohibits federal dollars being spent to cover insurance for most lawfully present immigrants.

New York has long provided health insurance for low-income immigrants with legal standing due to a 2001 Court of Appeals ruling that determined the state has a constitutional obligation to do so. For years, the state covered insurance for green card holders and those with asylum and protected status through its portion of the Medicaid program.

That changed with the Affordable Care Act, which allowed federal funds to be used to cover insurance for lawfully present immigrants. New York, as a result, moved enrollees into its Essential Plan, saving the state billions on Medicaid expenses.

Unlike traditional Medicaid where costs are split evenly between the state and federal government, the Essential Plan is fully funded through federal dollars.

More than 700,000 immigrants are enrolled in the Essential Plan, according to an analysis by the Empire Center.

Federal funds do not cover health care costs for undocumented immigrants.

In a bid to preserve health insurance for as many as possible, Gov. Kathy Hochul in September directed the state's Department of Health to a plan to the Centers for Medicare and Medicaid Services (CMS) seeking to revert the Essential Plan back to its original income limit of 200% of the federal poverty limit.

The move could also allow the state to tap into a nearly $10 billion surplus it has to help offset costs for immigrant enrollees.

The surplus was created by a clause in the ACA that allows states that create "Medicaid-like programs" to collect 95% of ACA tax credits those individuals would have received if they enrolled in other plans, according to the Empire Center.

Thousands throughout the Capital Region have enrolled in the Essential Plan as part of the 250% threshold as of Jan. 4. That includes 5,401 in Albany County, 3,906 in Schenectady County, and 3,670 in Saratoga County.

A combined 4,812 are enrolled in the program in Columbia, Fulton, Greene and Montgomery counties at the 250% threshold, according to state data.