Lawmakers, state officials scramble to help 450,000 New Yorkers set to lose health insurance

Hundreds of thousands of New Yorkers received notice yesterday that they would lose health care coverage under the Essential Plan starting on July 1. Both state lawmakers and Gov. Kathy Hochul are taking steps in an attempt to mitigate the fallout for those on the verge of losing insurance, even as some officials assert the impacted population will ultimately be much smaller than predicted. 

Thanks to cuts and changes made as part of the federal spending plan Republicans approved last year, roughly 450,000 New Yorkers currently insured at little to no cost through the heavily subsidized Essential Plan will lose that coverage. For the state, this is the best-case scenario. Until about two weeks ago, 1.7 million people could have lost their insurance thanks to the federal changes. 

But after months of waiting, the federal Centers for Medicare & Medicaid Services approved a request from the state on March 20 that keeps 1.3 million New Yorkers on the Essential Plan. However, that came at the cost of the hundreds of thousands of people – who benefited from a previous state expansion of the plan to cover those who made between 200% and 250% of the federal poverty line – losing their coverage. With federal approval, New York will return to a Basic Health Program under the Affordable Care Act, leaving those nearly half a million residents ineligible for the Essential Plan. 

After receiving word the federal government approved a waiver to ensure uninterrupted coverage for the larger of the two populations, state Sen. Gustavo Rivera introduced legislation a week ago to protect the remaining New Yorkers now left in the lurch. “We don't know exact, exact numbers on the whole thing, but we know enough to know that it's bad,” said Rivera, chair of the Senate Health Committee. Assembly Member Amy Paulin, the chair of the Assembly Health Committee, plans to introduce the measure in her own chamber. 

The bill would authorize the state to start covering those who make between 200% and 250% of the federal poverty line, with the state footing the entire cost. Estimates for the cost to the state range from $400 million at the low end to $2.3 billion if every affected person takes advantage of the opportunity, though that would be very unlikely. “The money is there, it's not going to be that much at all,” Rivera said. “We've got the 400 million, and we should do it.”

The proposal from Rivera and Paulin came late in the budget negotiating process, and the pair only held a rally for the measure on Wednesday, the day after the state budget was technically due. But both lawmakers expressed confidence the matter has nonetheless entered into ongoing discussions while the spending plan is delayed. “I believe that all parties know about the bill,” Paulin told reporters. “I've had conversations with the governor's staff … I believe everybody wants to do something. It's a matter of what we do.”

Speaking to reporters on Wednesday, Assembly Speaker Carl Heastie suggested that the number of people losing all health coverage may be lower than the commonly cited 450,000 number. “There are some people who actually benefited from the plans that the state put forward because it was better than the health plan that may have been offered under their employers,” he said. “So I think after discussions today, the real number that may really be without health benefits might be about a third of that.” But Heastie still expressed reservations about how much it would cost the state to insure even that smaller group. 

State Budget Director Blake Washington didn’t offer details on how new negotiations around the issue have started to shape up, but echoed Heastie’s warning about costs. “How do you continue a program at state cost only that was once a federally funded program?” Washington said to reporters on Wednesday. “And those costs onto the state are very, very exorbitant.”  He pegged the cost of insuring all 450,000 people who could lose health insurance at $3.5 billion, even higher than Rivera’s estimate

Washington also confirmed the rough estimate Heastie offered about impacted New Yorkers, describing it as “the best possible sort of scenario” for New Yorkers on track to lose Essential Plan coverage. According to him, about 300,000 New Yorkers could return to an employer plan utilized two years ago, or go back to one of the qualified health plans on the exchange. “Of course, it would be at a greater cost to them,” he said.

As state leaders figure out how to move forward to assist as many New Yorkers as possible, the state Department of Health has already begun taking steps to ease the transition that will take place in three months. Danielle Holahan, the executive director of the Essential Plan, said her staff has started reaching out to consumers by mail in order to clearly lay out what will happen come July 1, and what their options are. “We'll also be communicating with the consumers via email and text, just to make sure this message is received and written in a (straightforward) way – I think the notices are pretty technical,” Holahan told City & State. “So we are working to ensure consumers know what's happening, why and when.”

Holahan deferred to Washington on specific number estimates for New Yorkers who will ultimately become uninsured, but stressed the volatility of the matter. “We don't assume all the 450,000 become uninsured, but it's hard to predict what employers are going to do,” she said. Holahan also spoke about the difficulty of working around so many moving parts, with a much-needed answer from the federal government only coming about two weeks ago. “We hope to find a path forward,” she said. “But the challenge before us, and the magnitude of these funding changes, is quite significant. So there's a lot here, and there's a lot of work to do in the next couple of weeks.”