The New York State Legislature gaveled out its 2026 session this month and went home. It left behind a deadline it chose not to touch: on July 1, roughly 450,000 New Yorkers are set to lose their health insurance, and Albany passed a state budget that does nothing for them, City & State reported. The state had already set aside the money to keep them covered. It chose not to spend it.
The program is the Essential Plan, New York’s free, no-premium, no-deductible insurance for people who earn too much for Medicaid but not enough to comfortably buy a plan on the open market. It currently covers about 1.6 million New Yorkers. The cut comes from Washington. The federal law known as H.R. 1, the One Big Beautiful Bill Act, gutted the funding stream that paid for the Essential Plan’s expanded version, and New York stands to lose an estimated $7.5 billion a year in federal money as a result, according to the Greater New York Hospital Association.
To keep the program alive at all, the state is rolling it back from the original federal Affordable Care Act blueprint, dropping the income ceiling from 250 percent of the federal poverty level to 200 percent. In dollars, the new cap is about $31,300 a year for one person and $42,300 for two, per NY Health Access. Everyone who earns between 200 and 250 percent of the poverty line, roughly $32,000 to $40,000 for an individual or $54,000 to $68,000 for a family of three, gets dropped, THE CITY reported. That is the working poor: home health aides, restaurant workers, gig drivers, the people who make this city run on $35,000 a year.
The state did manage to save most of the program. In March, the federal government signed off on New York’s plan to revert the Essential Plan to the older Basic Health Program structure, which preserved coverage for 1.3 million people. The Centers for Medicare and Medicaid Services approved the waiver on March 20, City & State reported. The 450,000 in the 200-to-250 band are simply not part of that rescue.
So lawmakers wrote a fix. State Senator Gustavo Rivera, who chairs the Senate Health Committee, introduced S9589, and Assemblymember Amy Paulin carried a companion bill, both directing the state to keep covering the 200-to-250 group on its own dime, per City & State. The price tag is real but not enormous by Albany standards. The Community Service Society estimated it could cost as little as $393 million this fiscal year, rising to about $675 million a year by 2029, Gothamist reported. The Hochul administration’s budget director put the worst case higher, around $3.5 billion if everyone enrolled, City & State reported. Rivera’s take was simple: “The money is there, it’s not going to be that much at all.”
And the money was there. Earlier in the year, Governor Kathy Hochul set aside roughly $2.4 billion in Essential Plan contingency funds, a cushion in case the federal approval to keep the program alive fell through. The approval came through in March, so the cushion went unused, more than 75 lawmakers wrote in a letter urging her to redirect it, Gothamist reported. A reserve built for exactly this situation is sitting idle while the people it was meant to protect get dropped.
The fix never moved. It was left out of the budget, and it never came up for a floor vote in the session’s final week, City & State reported. The reason was no secret. Rivera was blunter about the dynamic in Albany, telling Gothamist: “We’re not engaging with it in a real way.” Assembly Speaker Carl Heastie called it a budget problem with no clean answer: “We’ve kind of bounced around some ideas, but no matter which iteration you try to come up with, it still requires the state to come up with billions.”
Hochul’s office has kept the spotlight on Washington. A spokesperson said New York’s “Republican members of Congress own these healthcare cuts after voting to rip healthcare away from millions,” Gothamist reported, and her office said only that it was reviewing the lawmakers’ letter. The federal law is the original cause, and that part is true. But it sidesteps the choice in front of the state, which is whether to spend a reserve it already created to soften the hit.
The Essential Plan was not the only thing left on the cutting room floor. The same session let the Packaging Reduction and Recycling Infrastructure Act (A.1749/S.1464) die again in the Assembly for lack of votes, and passed a one-year data center moratorium that was negotiated down from an originally proposed three years, City & State reported. But the packaging bill can come back next year. The 450,000 cannot wait until next year for a doctor.
If you or someone you know is on the Essential Plan and earns in that 200-to-250 percent band, the clock is running. The shopping period for replacement Qualified Health Plans opened May 16, and the deadline to pick a new plan and avoid a coverage gap is August 30, THE CITY reported. Free help from a navigator is available through NY State of Health, and you can reach the marketplace directly at (855) 355-5777. For care in the meantime, NYC Health + Hospitals runs NYC Care, which provides free or low-cost services to uninsured New Yorkers citywide, at (646) 692-2273. And if you think the state should spend the reserve it already set aside, the people who introduced the fix, Senator Gustavo Rivera and Assemblymember Amy Paulin, take constituent calls, and the governor’s office is the one reviewing the letter.
Featured image: Kurtman518 / CC BY-SA 4.0 via Wikimedia Commons
