News Summary
Governor Kathy Hochul is set to phase out New York’s zero-premium health coverage program, the Essential Plan, impacting over 1.7 million low-income residents. The decision follows a significant reduction in federal funding, leading to anticipated loss of coverage for approximately 450,000 individuals. Despite claims of necessary budget cuts, health officials warn of serious ramifications for community health and the stability of the state’s healthcare system.
New York Governor Kathy Hochul has announced plans to phase out a zero-premium health coverage program that serves low-income residents. This decision comes as a direct response to cuts in federal funding resulting from a recent Republican tax and spending package passed in July.
The federal funding reduction affects New York significantly, amounting to approximately $7.5 billion out of the $14 billion that the state receives annually for health coverage. This financial change places a substantial burden on the state’s health care system, potentially impacting over 1.7 million enrollees currently using New York’s Essential Plan, which provides free health insurance to eligible working-class residents.
The Essential Plan primarily serves individuals with incomes up to 250% of the federal poverty level, equating to $80,375 for a family of four. However, as part of the transition to overcome this funding shortfall, New York will revert back to a standard version of the Essential Plan, restricting eligibility to those making up to 200% of the federal poverty level. This change is anticipated to result in approximately 450,000 New Yorkers losing their coverage by next summer.
Health officials have described the move as a necessary precautionary measure aimed at preventing further cuts to health care services throughout the state. The Essential Plan is solely funded through federal resources, with a considerable portion of its enrollees being “lawfully present immigrants.” The expected cuts to the program may exacerbate the existing instability within New York’s health care system, putting 75 financially troubled hospitals at an increased risk of financial distress.
Governor Hochul has expressed her strong opposition to the federal government’s decisions, highlighting that such reported cuts disproportionately affect vulnerable populations in New York. The planned transition is scheduled to take effect on July 1, pending approval from the Centers for Medicare and Medicaid Services. During this period, public comments on the proposed changes will be accepted for 90 days, concluding on October 10.
State Health Department officials have highlighted that the shifts in federal funding will lead to serious consequences, prompting many residents to face difficult choices between managing bills and affording basic necessities like food. Prior to these proposed changes, the Essential Plan’s eligibility was expanded in 2024 to include Deferred Action for Childhood Arrivals (DACA) recipients, allowing even more individuals access to much-needed health coverage.
It is estimated that about 725,000 of those currently enrolled are lawfully present immigrants whose health coverage is now at risk due to these federal funding cuts. Notably, New York’s constitution mandates health coverage for 500,000 lawfully present immigrants who satisfy the income eligibility criteria. Additionally, the Hochul administration has pointed out that major employers are limiting workers’ hours to avoid health care coverage obligations, which further complicates access to health care for many residents.
While the state anticipates that the changes will save approximately $3 billion in its own funds allocated for Medicaid coverage, the overall impact on community health and well-being remains a pressing concern for many New Yorkers. The proposed cuts threaten not just individual access to health care but may also unravel the foundational stability of New York’s health care system.
Deeper Dive: News & Info About This Topic
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Author: STAFF HERE NEW YORK WRITER
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