Can the state keep 450K Essential Plan enrollees insured after July? It’s not looking great.

Nearly half a million New Yorkers are set to lose health insurance under the state’s heavily subsidized Essential Plan. While state leaders agree that’s a huge problem that the state will need to address, the likelihood they’ll include specific measures to help people weather the storm in the late state budget seem increasingly slim. 

Thanks to federal changes implemented as part of last year’s HR1 spending bill, Essential Plan enrollees who make between 200% and 250% of the federal poverty line will lose access to that low-to-zero premium insurance. The number of impacted New Yorkers was originally over a million, but the federal government approved a state waiver to amend Essential Plan coverage to stave off the worst of the cuts – at the expense of the higher-income population that gained access to the health insurance coverage after an expansion two years ago. 

Speaking to reporters Thursday, Assembly Speaker Carl Heastie acknowledged the need for the state to find a way to help the remaining 450,000 people who will get kicked off the Essential Plan in July, calling the situation “heartbreaking.” But he said the state doesn’t have the money right now to do what some advocates and lawmakers are pushing for.

“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,” Heastie said. “I’m not sure the money is there under our current tax structure. So we talk about it, we care about it, but I don’t know if we’re going to be able to solve that.” 

Heastie’s Health Committee chair, Assembly Member Amy Paulin, has been pushing alongside state Sen. Gustavo Rivera – her counterpart in the upper chamber – legislation that would require the state to continue covering those who would lose access to the Essential Plan. That includes several thousand lawfully present immigrants who make between 133% and 200% of the federal poverty line and aren’t eligible for Medicaid. Costs to the state range from $400 million if fewer people take advantage, to $3.5 billion if every person eligible stayed enrolled (as opposed to switching to employer insurance or a marketplace plan).

Paulin and Rivera sent a letter to Gov. Kathy Hochul on Wednesday, signed by over 75 legislators across both chambers, asking that she support their legislation and include it in the final budget. Among other funding mechanisms, they pointed to a $2.4 billion emergency fund she set aside in her original executive budget proposal to be used in case the federal government did not approve the state plan to ease the effects of the cuts. Given the state received that approval, the two chairs argued that money should instead go toward covering costs for New Yorkers still left in the lurch. 

“While we acknowledge that the bill as it’s currently drafted may not be the final product, we think it serves as a strong framework for discussions on how to best preserve healthcare access for these New Yorkers,” the letter reads.

Asked about a funding proposal pushed by some advocates and included in Paulin and Rivera’s legislation, Heastie did tell reporters that state leaders and top staff have discussed charging a small premium for Essential Care coverage as a means to help offset the cost to the state while maintaining an affordable insurance option. “The governor of New Jersey proposed that, so we talked about trying to do something like that as well,” he said. “But I don't know if we've resolved that yet.”

Rivera held firm that the state can and must address the issue in the budget. “The money is there and was intentionally set aside in the governor’s original proposal to the tune of $2.4B,” he said in a statement to City & State following Heastie’s comments. “In fact, the Assembly’s one house proposed spending it for this crisis… I do not want to go home and shrug when my constituents ask what Democrats in Albany did to protect their health coverage.”

A spokesperson for the governor said Hochul would review the letter, and would “continue to negotiate with her partners in the Legislature” for a final budget that helps all New Yorkers. “While no state can backfill these devastating cuts, the Governor took decisive action to protect coverage for as many New Yorkers as possible – over 1.3 million people that would’ve otherwise lost coverage due to Republicans’ cruel decision,” the spokesperson said.

As Tuesday afternoon, before she and Rivera sent the letter to Hochul, Paulin told City & State that leaders had not yet discussed the Essential Plan in budget talks to the best of her knowledge. “If there’s conversations I would know about them, and there’s no conversations I’m aware of,” she said. It was not immediately clear how much the situation has changed since then following Heastie’s Thursday comments. 

But Paulin said she still expects the issue to be resolved in the budget, adding it would be too expensive to address the 450,000 New Yorkers set to lose insurance outside the annual spending plan. She criticized the drawn-out budget process for preventing productive discussions about changes to the Essential Plan. 

“We’re still hoping that we can address them,” Paulin said. “I have no idea when this budget’s going to get done.”