NEW YORK STATE DEPARTMENT OF HEALTH PROVIDES UPDATE ON FEDERAL APPROVAL TO PRESERVE HEALTH COVERAGE FOR 1.3 MILLION NEW YORKERS

Centers for Medicare & Medicaid Services Approves New York’s Request to Transition Back to Basic Health Program Authority

Approximately 450,000 New Yorkers Will Become Ineligible for the Essential Plan Beginning July 1, 2026, and Will Instead Be Eligible for Qualified Health Plans

The New York State Department of Health (NYSDOH) provided an update following federal approval from the Centers for Medicare & Medicaid Services (CMS) of the State’s request to terminate its Section 1332 State Innovation Waiver and return to Basic Health Program (BHP) authority.  The transition preserves Essential Plan coverage for approximately 1.3 million New Yorkers with incomes below 200 percent of the federal poverty level.

"Our priority is to ensure New Yorkers continue to have access to affordable, high-quality coverage,” State Health Commissioner Dr. James McDonald said.  “We are focused on supporting individuals through this transition and making sure they understand their options and can maintain continuity of care.”

Danielle Holahan, Executive Director of NY State of Health, said,  “No New Yorker should have to choose between keeping the lights on and seeing a doctor.  We are committed to doing everything within our power to support every affected member through this transition — connecting them with enrollment assistors, ensuring 90-day advance notices and making the path to new coverage as clear and accessible as possible.”

As a result of federal policy changes, most of the approximately 450,000 New Yorkers currently enrolled through the Essential Plan benefits will become eligible for Qualified Health Plans in the individual marketplace beginning July 1, 2026, where they may face higher premiums, deductibles, and out-of-pocket costs.  The loss of coverage for these low-income New Yorkers is a direct result of H.R. 1 (Public Law No. 119-21), the federal budget legislation championed by Congressional Republicans that eliminated funding for the expanded Essential Plan.  For the 450,000 affected New Yorkers, the transition from Essential Plan to Qualified Health Plan coverage represents a significant change.  While Essential Plan enrollees currently pay $0 in premiums and face minimal cost-sharing, Qualified Health Plans may include monthly premiums and higher deductibles.  Even with available federal tax credits, enrollees will incur monthly premiums and can face deductibles of thousands of dollars before coverage kicks in.  This comes at a moment when New Yorkers are already navigating household budget pressures that have stretched family finances to the limit.  The state cannot make up for these devastating cuts but is working with insurers to ensure that anyone moving from the Essential Plan to a Qualified Health Plan mid-year will see their deductible cut in half.  The affordability burden is compounded by the expiration at the end of 2025 of enhanced premium tax credits that were first established under the American Rescue Plan Act of 2021 – credits that Congressional Republicans allowed to expire.  Those credits significantly lowered QHP premiums for moderate and low-income consumers; without them, costs in the Qualified Health Plan market are nearly 40% higher than they would otherwise be — leaving the 450,000 transitioning New Yorkers in an even more financially precarious position.  The State will notify impacted enrollees on April 1, outlining their options and next steps.  NY State of Health will expand outreach and in-person enrollment assistance to help members find the most affordable coverage available to them under the Qualified Health Plan market.

Background

New York's Section 1332 State Innovation Waiver, approved by the federal government on March 1, 2024, expanded the Essential Plan to cover New Yorkers with incomes between 200 percent and 250 percent of the Federal Poverty Level — approximately 450,000 individuals and families who had previously been ineligible.  Under the expansion, these enrollees received $0-premium, low-cost-sharing coverage that provided access to comprehensive health benefits.  H.R. 1, signed into federal law in July 2025, eliminated premium tax credit eligibility for most lawfully present immigrants that made the expanded Essential Plan financially viable for New York State.  With half of the program funding eliminated, the State requested CMS approval to terminate the 1332 waiver, effective July 1, 2026.  CMS has approved that request.  The termination does not affect Essential Plan coverage for the approximately 1.3 million enrollees with income below 200 percent FPL, whose eligibility is protected under the Basic Health Program authority now in effect.

For more detailed information, including specifics on New York’s 1332 State Innovation Waiver termination approval, visit https://info.nystateofhealth.ny.gov/1332 NY State of Health 1332 Waiver Information Page | NY State of Health

How to Get Help

Affected New Yorkers are encouraged to contact NY State of Health to understand their options and get free enrollment assistance:

• Visit https://nystateofhealth.ny.gov/ nystateofhealth.ny.gov

• Call the NY State of Health Customer Service Center at 1-855-355-5777

• Find a free Certified Enrollment Assistor at https://nystateofhealth.ny.gov/agent/hx_brokerSearch?fromPage=INDIVIDUAL&lang=en Marketplace: Individual & Families.