Some 460,000 New Yorkers set to lose their health insurance due to federal cuts would get a lifeline from Albany under a proposal to use state money to preserve their coverage.
The bill emerged late in state budget talks and its fate is uncertain as Gov. Kathy Hochul and state Senate and Assembly leaders continue negotiating a spending plan well past its deadline. The budget was supposed to be adopted by April 1 but is now nearly four weeks late, bogged down by a string of policy disputes.
The looming health coverage loss is the result of policy changes in the package of tax and spending cuts that Republicans in Congress and President Donald Trump enacted last year. Facing the loss of $7.5 billion in federal funding for the state’s Essential Plan, the Hochul administration opted to undo a recent expansion of the program to save coverage for more than 1.2 million low-income New Yorkers.
But the result was that 460,000 other Essential Plan enrollees who qualified under a higher income cutoff since 2024 must be removed from the program when it reverts to the original limit, as of July 1. Those are people earning between 200% and 250% of the federal poverty level, or up to $31,920 for one person or $66,000 for a family of four.
How much NY state funding would be needed?
The bill to fund coverage for those enrollees was introduced by Sen. Gustavo Rivera of the Bronx on March 26 and by Assembly Member Amy Paulin of Westchester County on April 9. A flood of fellow Democrats have signaled their support by signing on as co-sponsors — including 38 who make up nearly all of the Senate’s large Democratic majority.
Their bill doesn’t specify how much is needed to shore up the Essential Plan — an amount that would have to be inserted into the impending budget. And neither chamber included funding for that purpose in the annual spending plans each presented in March as responses to the governor’s budget proposal.
The Fiscal Policy Institute, a left-leaning think tank, estimates it would cost New York a total of about $2 billion a year to offer at least temporary coverage to two groups losing insurance because of federal cuts. One is the 460,000 Essential Plan enrollees; the other is 800,000 New Yorkers projected to lose Medicaid coverage due to a new work requirement in Republicans’ federal “big, beautiful bill” that starts next year.
The Fiscal Policy Institute report defends that expense as cheaper than another recourse the state could have taken. The $2.5-billion-a-year alternative: offer Medicaid to nearly roughly 500,000 “lawfully present” immigrants who no longer qualify for the Essential Plan but must be covered by the state under a 2001 court decision.
What are the prospects for a state bailout?
Hochul has said repeatedly since last year that New York and others states can’t afford to replace all of the funding lost by last year’s federal law, which is expected to cut health care spending by nearly $1 trillion over a decade.
But where the Essential Plan bailout stands in the protracted budget negotiations was unclear on Friday, April 24.
“We are trying to figure out the best path forward after the reckless and dangerous actions by the Republicans in Washington including Mike Lawler,” Mike Murphy, a spokesman for Senate Democrats, said in an emailed response to the USA TODAY Network. “We know we need to help protect health care for New Yorkers.”
Lawler, a second-term congressman from Rockland County, is one of seven New Yorkers who voted for the “big, beautiful bill,” which the House passed last July 3 with all but two Republicans in support and every Democrat opposed. New York Democrats have gone after their state’s GOP House members over the law’s impact on health coverage and funding.
Republicans have defended the health care cuts as prudent reforms to root out wasteful spending. Lawler didn’t immediately respond Friday to a request for comment on the issue.
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.
Unless the state comes up with funding, those losing their coverage are being encouraged to seek insurance through their employers or seek to buy their own plans through the state-run Affordable Care Act exchange.
As many as 350,000 people are expected to regain coverage in those two ways, Hochul told reporters on April 4, while blasting the Congress members who supported the cuts.
“But Republicans who voted for this, they need to own this and I think they should never be let off the hook,” she said.
Hochul’s office was non-committal about the prospect of using state money to preserve Essential Plan coverage. In a statement to the USA TODAY Network on Friday, April 24, a spokesperson said: “The Governor will continue to negotiate with her partners in the Legislature to reach a budget agreement that delivers for all New Yorkers.”
Chris McKenna covers government and politics for The Journal News and USA TODAY Network. Reach him at CMcKenna@usatodayco.com.
This article originally appeared on Rockland/Westchester Journal News: NY weighs picking up health coverage cost for 460K hit by federal cuts
Reporting by Chris McKenna, New York State Team / Rockland/Westchester Journal News
USA TODAY Network via Reuters Connect
