News Summary
New York will begin phasing out its Essential Plan, ending zero-premium health coverage for about 450,000 residents. This decision follows federal funding cuts that impacted the state’s health budget. As a result, the eligibility limit will revert to 200% of the federal poverty level, disqualifying many enrollees. Concerns have been raised about the negative health impacts of losing coverage, as many may turn to more expensive private insurance options. The state is currently seeking public comments on this transition, which is set to start in 2025.
New York is set to phase out its Essential Plan, which currently offers zero-premium health coverage to working-class residents. This change will affect approximately 450,000 New Yorkers as a result of significant federal funding cuts stemming from the recent GOP tax and spending package.
The decision follows the passage of a megabill by Congress in July that slashed roughly $7.5 billion from the $14 billion allocated annually to New York for health coverage. This reduction deeply impacts the Essential Plan, which currently serves nearly 1.7 million low-income workers across the state.
The phase-out will see New York unwinding a waiver program endorsed by the Biden administration that provided free health insurance for individuals earning up to 250% of the federal poverty level. For context, this amount is approximately $80,375 for a family of four. The state plans to reinstate the original income limit of 200% of the federal poverty level, potentially disqualifying many enrollees who joined under the expanded eligibility introduced last year.
The transition is set to begin in July 2025, when the expected loss of coverage for those affected will take place. Additionally, the state initially considered migrating Essential Plan enrollees to Medicaid, although this approach would come with a hefty cost estimated at $2.7 billion annually. Ultimately, this option was deemed infeasible.
Frustration has been expressed by Governor Kathy Hochul regarding the adverse effects these funding cuts will create for vulnerable residents. Hospitals are reportedly adjusting their operational strategies in light of the Congressional healthcare changes, with the aim of minimizing any negative impacts on patients.
Currently, the state is inviting public comments on its plans to amend the Essential Plan’s eligibility limits for a period of 90 days. To shift back to the fundamental Affordable Care Act basic health program, federal approval is required from the Centers for Medicare and Medicaid Services (CMS).
Hochul has also encouraged employers to consider providing health insurance for part-time workers who may lose coverage under the Essential Plan. This suggestion is made in light of the anticipated financial strain these changes will place on taxpayers. The Essential Plan was initially established in 2015 to assist low-income workers who earn too much to qualify for Medicaid yet lack employer-sponsored insurance. The program has provided comprehensive healthcare with no premiums and some co-pays for enrollees.
With the eligibility changes, it is predicted that many former Essential Plan users will be compelled to seek private health insurance, which by average costs $220 monthly. Reports have indicated a noticeable decline in funding for health coverage among immigrants as a result of recent Congressional policy changes.
As of March 2025, New York’s Medicaid population has seen a significant reduction of approximately 930,000 individuals in a span of two years. Health officials express ongoing concerns regarding potential enrollment losses and how these could negatively affect health outcomes. The loss of coverage is expected to contribute to delays in seeking medical care, which may exacerbate health conditions and increase the burden on emergency services.
Deeper Dive: News & Info About This Topic
- Democrat and Chronicle: NY Ending Health Coverage for 450K After Federal Cuts
- Wikipedia: Affordable Care Act
- Newsweek: New York Removes Nearly 1 Million People from Health Care Plan
- Google Search: Health Coverage New York 2025
- Times Union: NY Shift 450K New Yorkers Essential Plan
- Encyclopedia Britannica: Medicaid
- New York Times: Trump Domestic Policy Bill New York Health Care
- Google News: Essential Plan New York
Author: STAFF HERE NEW YORK WRITER
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