New York receives partial approval for Essential Plan changes

ALBANY — The state's plan to preserve health insurance for 1.3 million New Yorkers enrolled in the Essential Plan has received partial approval, though it's still unclear what nearly half a million participants expected to lose coverage later this year will do for insurance following steep federal cuts to the program approved last year.

The Centers for Medicare & Medicaid Services last month approved the state's request to reinstate the Essential Plan's original income threshold that was expanded through a federal waiver in 2024, which resulted in 450,000 new enrollees in the no-cost health insurance plan.

The approval is the first of two CMS must sign off on before the state can begin notifying consumers about changes to the plan, which are set to take effect July 1. The second approval pertains to terminating the special waiver that allowed for the expanded income levels and is expected to be approved in the coming weeks.

"If approved, the state is prepared to send consumer notices 90 days before the effective date of a change in eligibility," a spokesperson for the state's Health Department said in a statement.

First established in 2015, the Essential Plan was created through a provision of the federal Affordable Care Act that allows states to create what's known as a basic health plan, or a low- or no-cost health insurance option for individuals between the ages of 19 and 64 that do not receive benefits through employment and earn between 133% and 200% of the federal poverty level, just above the Medicaid threshold.

Those income limits were expanded in 2024 to include those earning up to 250% of the federal poverty level following approval of a special waiver, which also suspended the state's original basic health plan. Officials praised the expansion at the time as an example of how the state was bolstering health care access while addressing affordability concerns.

But the state has been seeking to terminate the waiver and reinstate the plan's original income limits following the passage of the One Big Beautiful Bill Act last year, which slashed $7.5 billion from the Essential Plan, about half the program's total operating costs.

The cuts pertain to a clause in the legislation that prohibits federal dollars from being used to provide health insurance for lawfully present immigrants, which New York has long done, due to a 2001 state Court of Appeals decision that ruled New York has a state constitutional obligation to do so.

Around 700,000 lawfully present immigrants — including green card holders and those seeking asylum — are currently enrolled in the Essential Plan, which is funded through federal subsidies that would have otherwise been paid to insurance companies. New York does not provide insurance for undocumented immigrants.

In a bid to preserve insurance for as many as possible, the state last fall submitted a request to terminate the special waiver and reinstate the Essential Plans' original income limits.

The state has said the move will preserve health insurance for 1.3 million, but would result in 450,000 losing coverage, including thousands throughout the greater Capital Region.

A total of 3,906 individuals from Schenectady County with an income between 200% and 250% of the federal poverty level were enrolled in the Essential Plan as of December 2025, according to the most recent state data.

Another 9,049 were enrolled in the plan at the expanded income level in Saratoga County, and 5,401 in Albany County, according to the data.

It's unclear what those individuals who are no longer income-eligible for the Essential Plan will do for insurance moving forward.

A spokesperson for the state's Department of Health said the state continues to "discuss alternative coverage options" for those impacted by the change.

Changes to the Essential Plan are just one in a series of changes the state is facing due to changes approved in the One Big Beautiful Bill Act, which also slashed nearly $1 trillion from Medicaid over the next decade, which proponents, including Republican President Donald Trump, say are necessary to root out waste, fraud and abuse.

But critics argue the changes will increase the uninsured rate across the country and increase the cost of uncompensated care for hospitals, many of which are struggling to rebound financially after the pandemic.

At the same time, Congress let enhanced health care subsidies, first implemented during the pandemic, that helped reduce premiums for millions across the country who purchase insurance through markets created by the Affordable Care Act, expire.

Enrollment fell by nearly 1 million during the federal open enrollment period in January compared to the same period a year earlier, according to preliminary data, which shows that the number of New Yorkers purchasing health benefits through the exchange dropped to 206,037, a drop of 3%, or nearly 7,000 compared to the same period in 2025.

The state, however, has warned that those numbers could increase in the weeks ahead as people automatically re-enrolled in their plans disenroll due to the spike in costs.