Some 450,000 New Yorkers enrolled in the state’s Essential Plan stand to lose that health coverage next year under a fallback plan by the state in response to federal cuts.
State officials announced the changes Sept. 10 after weighing how to deal with the impact of those cuts on an insurance program used by 1.7 million low-pay workers in New York. Their recourse was to shrink eligibility as of next July, which will disqualify those who enrolled through a program expansion last year.
The state previously looked at a costly alternative: shifting many Essential Plan enrollees onto Medicaid at state expense, about $2.7 billion a year. That posed a big problem for next year’s budget and an immediate scramble for $750 million in the current spending plan.
The new approach — which requires federal approval — averts that fiscal pain. But it also forces New York to undo last year’s expansion of the Essential Plan, restoring the lower income cutoff it used to have and rendering ineligible those who signed up after the limit was raised.
In a statement, Gov. Kathy Hochul said that unwanted step was the best way for New York to save the Essential Plan for its 1.3 million remaining enrollees in the face of federal cuts enacted in July. She chastised Republicans for making those changes and urged them to delay their implementation for three years to cushion the blow.
Hochul also urged employers to step up and offer health insurance to their workers who will lose Essential Plan coverage next year.
“Many of the 1.7 million people on the Essential Plan are working part time, including at big retailers and other companies that deliberately limit hours to avoid covering health care,” she said. “It’s time for these employers to stop passing the cost on to taxpayers and start providing coverage for their workers.”
What is NY’s Essential Plan?
The Essential Plan is a federally funded, state-run program that New York created in 2015 to cover low-income workers who earn too much to qualify for Medicaid and don’t get health insurance at their jobs. It offers comprehensive care with no premiums and some copays.
New York got federal approval last year to raise the income limit for enrollees to 250% of the federal poverty level, which makes the current cutoff about $39,000 for an individual and $67,000 for a family of three. Undoing that change restores the original limit of 200% of the poverty level.
Who is affected by Essential Plan change and when?
Statewide, roughly 450,000 enrollees who earn more will be disqualified as of next July 1, when the state plans to make that change.
In Westchester County, that means about 17,000 of the county’s 58,000 enrollees will lose coverage, according to state figures. Here are how many Essential Plan beneficiaries in some other counties currently earn more than the lower limit and will also become ineligible:
The upshot, if approved by the federal government, is that the income cutoff for the program will drop next July and force many to buy their own coverage if their employers still offer none.
Those who lose Essential Plan coverage may qualify to buy federally subsized health coverage that now costs $220 a month on average, state officials say. Those private plans are available through the state insurance exchange created under the Affordable Care Act, the 2010 law known as Obamacare.
What federal cut led to this decision?
The Essential Plan took a big hit from the package of tax and spending cuts enacted this year by President Donald Trump and Republicans in Congress. That was due to a clampdown on health care funding for immigrants who are legally present in the U.S. but not citizens — one in a litany of cost-cutting policy changes in the law.
As a result, New York faced the steep loss of $7.5 billion a year in Essential Plan funding for those immigrants and a large Medicaid tab to continue covering many, which the state must do under a 2001 court decision. On top of that, about 225,000 immigrants who don’t qualify for Medicaid were expected to lose all coverage in 2027.
So instead, state officials chose to revert to the lower income threshold and forgo the Medicaid shift. The fiscal upside of that move: it restores access to a nearly $9 billion federal trust fund for the Essential Plan that was frozen by last year’s expansion. Officials say that money can now be used to help sustain the program.
Chris McKenna covers government and politics for The Journal News and USA Today Network. Reach him at cmckenna@gannett.com.
This article originally appeared on Rockland/Westchester Journal News: NY ending health coverage for 450K after federal funding cuts. Who is affected?
Reporting by Chris McKenna, New York State Team / Rockland/Westchester Journal News
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