Exclusive: New York scraps expanded state health coverage, citing GOP budget law
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New York Gov. Kathy Hochul (D) speaks about the impact of reduced federal funds on health care during an August press conference. Photo by Michael M. Santiago/Getty Images.
New York plans to phase out a program that offers zero-premium health coverage for working-class residents due to funding cuts in the GOP's tax and spending package, Gov. Kathy Hochul's office tells Axios first.
The big picture: The megabill Congress passed in July slashed about $7.5 billion of the $14 billion in federal funds that New York gets annually to cover nearly 1.7 million people in its so-called Essential Plan.
- The state will no longer be able to maintain enrollment at that level as a result, Hochul (D) said.
State of play: New York on Wednesday will begin unwinding the waiver program that was approved by the Biden administration last year to provide free health insurance to people making up to 250% of the federal poverty level, or $80,375 for a family of four.
- The state will revert back to the Affordable Care Act's basic health program, which allows states to draw down federal funding to cover residents — including lawfully present non-citizens — with incomes between 138% and 200% of the federal poverty level.
- About 1.3 million people will retain low-cost health coverage from the state while 450,000 residents will lose access, per Hochul.
New York last year got approval to expand the program to people making up to 250% of the federal poverty level, as well as Deferred Action for Childhood Arrivals recipients.
- But congressional Republicans used the reconciliation package to significantly limit immigrants' ability to access premium tax credits for health coverage, which generates funding for New York's expanded program.
- New York law requires the state to provide coverage to lawfully present immigrants making up to 138% of the federal poverty level, but the changes mean they'll no longer be able get ongoing federal funds for the population.
What they're saying: "I refuse to stand by while Washington punishes vulnerable New Yorkers," Hochul said in a statement to Axios.
- Hochul is pressing Congress to delay the megabill's cuts to coverage eligibility for three years. She's also urging the Trump administration to offer additional affordable coverage options, and large employers to provide lower-cost insurance choices to employees.
The Greater New York Hospital Association said that the changes to health insurance passed by Congress are already causing hospitals to adjust without hurting patients.
- "An ideal scenario would be that the cuts can be eliminated or postponed at the federal level," GNYHA President Kenneth Raske told Axios. "Meanwhile, the governor is prudently taking a look at what initiatives she could take to reduce the impact."
- Hospitals will get the same reimbursement under the basic health program as they do from the Essential Plan, which is higher than Medicaid rates in the state.
What's next: The transition to the original ACA basic health program is expected to go into effect by next July, pending approval from the Centers for Medicare and Medicaid Services. New York is accepting public comments on its plan to revert back for 90 days.
