450,000 New Yorkers to Lose Essential Plan Eligibility on July 1 After Federal Funding Change

About 450,000 New Yorkers in the Essential Plan expansion are set to lose eligibility beginning July 1, forcing them to move to other coverage through the state marketplace after federal law changes ended funding for that expanded program. In a March 23 press release, the New York State Department of Health said, “Approximately 450,000 New Yorkers will become ineligible for the Essential Plan beginning July 1, 2026.”

The change does not affect all Essential Plan members. It applies to the expansion group with household income between 200% and 250% of the federal poverty level. Those enrollees had been covered after New York broadened the program in 2024, but they are no longer eligible once the state returns to the Basic Health Program, which covers people with incomes up to 200% of the federal poverty level. Coverage for the affected group ends June 30, with the eligibility change taking effect July 1.

State health officials said the shift follows federal action earlier this year. According to the Department of Health, the Centers for Medicare and Medicaid Services approved New York’s request on March 20 to terminate its Section 1332 waiver and return to Basic Health Program authority. The department tied that move to H.R. 1, Public Law 119-21, the federal budget law that it says eliminated funding for the expansion. “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 … that eliminated funding for the expanded Essential Plan,” the agency said.

The state said it began notifying affected residents starting April 1, meaning this is not a last-minute June 30 notice. People losing Essential Plan eligibility can use NY State of Health, the state’s health insurance marketplace, to compare options and enroll in new coverage at nystateofhealth.ny.gov or by calling 1-855-355-5777. On June 22, New York Attorney General Letitia James said the loss of Essential Plan coverage qualifies people for a special enrollment period through the marketplace, allowing them to sign up for a replacement plan outside the usual enrollment window.

For many households, the practical impact is likely to be higher health care costs. The Essential Plan has offered $0 premiums and minimal cost-sharing, while marketplace Qualified Health Plans generally come with higher premiums, deductibles and other out-of-pocket costs. State and attorney general guidance both say people moving from the Essential Plan to marketplace coverage are likely to pay more. The Health Department said it is working with insurers so that people moved midyear from the Essential Plan to a Qualified Health Plan would have their deductible cut in half. State Health Commissioner Dr. James McDonald said, “Our priority is to ensure New Yorkers continue to have access to affordable, high-quality coverage.” Danielle Holahan, executive director of NY State of Health, added, “No New Yorker should have to choose between keeping the lights on and seeing a doctor.”

The broader Essential Plan is not disappearing. New York says about 1.3 million residents with incomes under 200% of the federal poverty level will remain covered after the state reverts to Basic Health Program authority. That leaves the coverage loss concentrated in the 200% to 250% poverty-level expansion group, whose members now must transition to marketplace plans if they want to avoid a gap in coverage.