Hochul Ditched Promise of Health Insurance for Undocumented People. She Could Cost New York $500 Million.

LAST APRIL, Governor Kathy Hochul made a pledge: New York would “reach out to the federal government” and ask it to fund health insurance for low-income undocumented immigrants.

She wasn’t alone. Colorado and Washington got federal cash to fund insurance for undocumented people last year. California and Illinois created similar programs using state funds.

But last week, when Hochul unveiled her budget proposal for New York’s next fiscal year, the promise was left out. Hochul’s backtrack will likely leave tens of thousands of undocumented people without health insurance.

And it could cost New York hundreds of millions of dollars, according to experts across the political spectrum. That’s because without the federal dollars, New York will have to continue its current policy: paying for undocumented New Yorkers’ emergency health care using its own money.

“If you could get them into coverage, especially coverage paid for by the federal government, we would save the state money and it would improve their lives,” said Bill Hammond, a senior health policy expert at the conservative Empire Center.

“This is not an example of being penny-wise and pound-foolish. It’s just being pound foolish,” said Elisabeth Benjamin, vice president for health initiatives at the liberal Community Service Society.

Justin Mason, a spokesperson for Hochul, confirmed that undocumented immigrants are not included in her proposal.

“Governor Hochul believes all New Yorkers should have access to high-quality health care and that expanding coverage will help improve health outcomes and reduce unnecessary financial burdens on our state’s health care system,” Mason said. “As we move forward through 2023, the Governor will continue to explore options that will help broaden coverage throughout our state.”

ABOUT ONE IN FOUR of the roughly 1 million New Yorkers with no health insurance are undocumented, according to Patrick Orecki, director of state studies at the fiscally conservative think tank Citizens Budget Commission. Undocumented and uninsured New Yorkers can go years without seeing a doctor, and often do not seek medical attention when they’re sick for fear of incurring unaffordable doctor’s bills or attracting attention from the authorities.

“When I feel sick and my daughter notices, she worries, and sometimes she can’t sleep,” Gabina Santamaria, an undocumented single mother from Staten Island, told New York Focus last year. “I say to her that I can’t just go and see a doctor whenever I need to, because I don’t have the money.”

Expanding coverage to undocumented New Yorkers “is one area where the state could do some work to close the coverage gap,” said Orecki, who last year co-authored a report on uninsured New Yorkers with Benjamin.

Federal policy usually prevents undocumented people from enrolling in Medicaid and other low-cost insurance plans the government offers, but states can apply for exceptions or provide their own coverage. Hochul’s promised expansion would have asked the federal government to waive this prohibition.

Last year, immigrant activists fought for months to make all low-income undocumented people eligible for the New York Essential Plan, a program similar to Medicaid, and for the state to fund their coverage. Hochul approved a more limited measure: expanding Medicaid eligibility to undocumented immigrants 65 and older and new mothers.

The state Department of Health recently delayed the planned start date of the Medicaid expansion for undocumented seniors, spokesperson Jeffrey Hammond told New York Focus. It was originally supposed to start on January 1, 2023, but the department moved that back to January 2024. Hammond did not give a reason for the delay.

Undocumented children were already eligible for state-sponsored insurance, but undocumented New Yorkers from ages 19 to 64 remained ineligible for Medicaid and other low-cost insurance plans run by the government.

Immigrant activists were bitterly disappointed.

“We got some wins,” said Assemblymember Jessica González-Rojas, who was one of the leading voices pushing for the coverage expansion. “But obviously if you are not pregnant or not over 65, there’s a big gap.”

González-Rojas and her allies expected that Hochul would follow through on her promise to seek federal dollars to fill that gap.

She didn’t. Hochul’s proposed budget expands coverage only for citizens and legal residents, by asking the federal government to pay for an expansion of the state’s Essential Plan. The terms specify that undocumented immigrants are not included.

“We’re deeply disappointed,” González-Rojas said. “We anticipated that it would be included, because she made a commitment last year, so it is baffling and inexplicable.”

González-Rojas said she and other supporters plan to press the governor and legislative leaders to include the full expansion.

NEW YORK SPENT about $500 million on undocumented New Yorkers’ urgent health care needs through its “Emergency Medicaid” program in 2021, the most recent year with data available, according to the health department. If the state got the federal government to agree to pay for undocumented New Yorkers’ coverage, it could use those funds for other purposes.

“That $500 million can be spent on anything: It can be spent on the MTA, it can be spent on potholes upstate,” Benjamin said.

New York already has a pot of unused federal money that could potentially pay for the expansion. Since the Essential Plan began in 2016, the federal government has consistently given New York more money to fund the plan than it costs. A spokesperson for Comptroller Thomas DiNapoli told New York Focus the state currently has over $9.3 billion in unused Essential Plan funds.

New York gets to keep that money, but can only spend it on state health plans. If the federal government made undocumented immigrants eligible for the Essential Plan, New York could use that $9 billion cash pot to pay for their coverage.