Alliance Alert: This troubling development highlights the very real and immediate consequences of recent federal Medicaid policy changes, and the difficult decisions states like New York are now being forced to make in response.
As outlined in the article below, New York’s decision to scale back eligibility for the Essential Plan will result in roughly 450,000 individuals losing coverage. While deeply concerning, this action was taken to preserve coverage for the remaining 1.3 million New Yorkers enrolled in the program and to prevent even more devastating losses in the face of significant federal funding cuts.
This moment underscores the growing strain federal policy shifts are placing on state systems, providers, and communities, particularly for those already facing barriers to services. We know that loss of coverage leads to delayed treatment, worsening health outcomes, and increased pressure on already overburdened behavioral health and human services systems.
The Alliance will continue to closely monitor state actions to mitigate the harm caused by these federal changes, while also pushing for policies and investments that protect access to support and ensure New Yorkers can get the services they need.
We also encourage our community to join us at our upcoming Alliance Executive Seminar, where we will hear directly from state officials about how New York is responding to these federal shifts and what steps are being taken to minimize harm and protect critical services and supports.
Register Today:
2026 Alliance for Rights and Recovery Executive Seminar Tickets, Thursday, Apr 16 from 9 am to 4 pm | Eventbrite
Hochul Blames GOP Lawmakers for Insurance Cuts as 450,000 Prepare to Lose Coverage
By Amanda D’Ambrosio | Crain’s Health Care | April 2, 2026
Gov. Kathy Hochul blamed the state’s seven Congressional Republicans for looming cuts to the state’s Essential Plan, as roughly 450,000 New Yorkers began receiving notices on Wednesday that they were no longer eligible for coverage.
The state received federal approval last month to undo an expansion of the Essential Plan, a state-operated insurance program for individuals who don’t qualify for Medicaid. The move will significantly scale back enrollment in the program by making individuals between 200% and 250% of the federal poverty limit ineligible starting in July. However, it will allow the state to tap into a nearly $9 billion federal trust fund to cover federal funding losses, which the Hochul administration says is necessary to pay for coverage for the Essential Plan’s remaining 1.3 million enrollees.
Hochul, who is facing reelection, pursued the strategy to mitigate funding losses under President Donald Trump’s One Big Beautiful Bill Act, also known as H.R. 1. The governor says the state’s seven Congressional Republicans, who did not vote to block the megabill, are at fault for the coverage losses, adding that it’s not possible for New York to backfill federal cuts. But some advocates say that Hochul should step up to ensure people retain insurance, even if it’s on the state’s dime.
“We should be crystal clear, the state does have the power to backfill those cuts and protect coverage for New Yorkers,” said Michael Kinnucan, health policy director at the left-leaning think tank Fiscal Policy Institute. He pointed to a bill introduced by state lawmakers that would authorize the state to maintain Essential Plan coverage using its own funds.
Kinnucan said that it is true that Congressional Republicans “intentionally and knowingly” voted for a bill that would cause hundreds of thousands of New Yorkers to lose health insurance. But he said New York has the authority and the money to cover costs, given that the governor set aside emergency funding in her budget proposal to offset cuts if the federal government rejected her Essential Plan overhaul.
The governor’s office released data on Wednesday showing that more than 126,000 individuals slated to lose access to the Essential Plan live in Republican congressional districts.
“From the beginning, I sounded the alarm about the devastating impact H.R. 1 would have on our hospitals and health care system, and made clear that no state can fully backfill cuts this severe,” Hochul said in a statement Wednesday, adding that the individuals slated to lose access to health insurance face a serious crisis “at the hands of these seven New York Republicans.”
“New Yorkers deserve better than the decisions coming out of Washington,” Hochul said. “They must fix this now.”
Some of those fixes could include authorizing the state to pay for cost-sharing reductions — a suggestion that was rejected by the U.S. Centers for Medicare and Medicaid Services, said Nicolette Simmonds, a spokeswoman for Hochul. She added that the federal government could also reauthorize enhanced premium tax credits to help individuals afford insurance plans on the Affordable Care Act marketplace, which expired in December.
For now, the state is helping individuals slated to lose coverage sign up for insurance through the state’s marketplace, also known as New York State of Health. Open enrollment will begin on May 16 and last until Aug. 30, according to the governor’s office.
Qualified health plans are significantly more expensive than the Essential Plan, which has zero monthly premiums and no annual deductible. The average cost of a mid-tier plan is $220 per month, said Danielle Holahan, executive director of New York State of Health.
“We are mindful that this is not news that will be well-received, and it hurts that we had to do it,” Holahan said. “But I will continue to put this back on Washington.”
April 2, 2026: A previous story misspelled Simmonds’ name. The story has been corrected.