Hochul’s 30-day budget amendments mum on Essential Plan debate

Gov. Kathy Hochul did not alter a provision in her proposed budget that could cause over 470,000 legal noncitizens in New York to lose their health coverage in her 30-day budget amendments released Thursday. 

Hochul’s revised $262.7 billion spending plan directs $1.1 billion from a tax on Medicaid insurers to health clinics, and as part of increased aid to New York City, but her decision to let coverage lapse this July for immigrant New Yorkers remains untouched.

The state’s Essential Plan gives health coverage to about 1.7 million New Yorkers, but changes in Trump’s massive spending and tax law signed last year disqualify most legal noncitizens from receiving federal funding for health care. Last fall, the state asked U.S. Centers for Medicare & Medicaid Services for permission to use billions of dollars in existing Essential Plan funds to continue coverage for legally present noncitizens. Federal officials have yet to make a decision.

“When you're putting a state financial plan together, you have to count on what you know – not what you don't know," state Health Commissioner Dr. James McDonald told reporters last week after a budget hearing in Albany. “It’'s a worst-case scenario assumption.”

McDonald said the state Health Department believes New York will ultimately get the federal approval, but the governor’s budget – which increases Medicaid spending 11.4% – assumes the Trump administration will reject the state’s request to tap into the plan’s surplus to fill the gap.

“We have to try our best to cover everybody no matter what happens here,” he said. “And that’s why the state financial plan is so conservative this year.”

Legal noncitizens will lose coverage under the Essential Plan on July 1 under Hochul’s current proposal. The budget deadline is April 1.

Consumers would be notified at least 90 days before their health coverage ends, according to Hochul’s office.

"Our goal is for the 1.7 (million people) to experience absolutely no change whatsoever," New York Medicaid Director Amir Bassiri told reporters after last week’s hearing. "They will be notified at the appropriate time and in concert with noticing requirements."

Hochul has been trying to appeal to New York House Republicans to join her in advocating for New York to use existing federal dollars to cover most of the immigrants who could lose coverage, Politico New York reported this week. 

So far, state leaders have still not heard from federal officials about whether its request will be granted.

“We’re waiting,” McDonald said. “We’ll see.”

CMS did not answer questions from City & State about what the agency thinks of the state’s request, or when it would issue a decision.

The controversial health spending debate won’t truly begin in New York until next month when the state Senate and Assembly release their counter proposals to Hochul’s executive budget.

“If the federal government rejects the waiver, we're screwed,” state Sen. Gustavo Rivera, chair of the chamber’s health committee, said in an interview with City & State. “We'll take them to court.”

But the Trump administration has given New York some surprises, like approving the state’s request to extend a tax on Managed Care Organizations. And Rivera said he’s crossing his fingers.

“I am hopeful, but not necessarily that much,” Rivera said. “I'm hopeful, at least, if the feds do indeed screw us and do not approve it, I am thankful we have the attorney general that we have and I know she would go to war for us as she's done in the past.”

Hochul will continue to work with CMS to design or provide coverage options for people who will no longer qualify for coverage, according to the governor’s office. 

"Gov. Hochul made a difficult decision to revert back to the Basic Health Program to protect coverage for over 1.3 million New Yorkers and she will continue to fight back against these devastating cuts,” the governor’s Deputy Press Secretary Nicolette Simmonds said in a statement. “But real people will lose coverage due to the heartless decisions by Trump and New York's seven Republicans in Congress."

City & State asked state Comptroller Tom DiNapoli about the proposed Essential Plan changes Sunday during Albany’s Caucus Weekend. 

“I don’t want to see people lose health insurance coverage,” he said. “The attacks that we’re getting from Washington are really going to hurt people, we have to figure out how to backstop on all that.”

But the comptroller wouldn’t say if the state should use its own revenue to make the program whole, adding it will be up to legislative leaders to make the decision.

“That’s what the budget process is all about, right?” DiNapoli said.