Legislators Push for Stronger Safety Net but Stop Short of Restoring Benefits

The federal cuts included a chunk of funding for the state’s Essential Plan, which provides health insurance to 1.7 million low- and middle-income New Yorkers. That funding expired earlier this year. The governor’s executive budget did not include a clear path forward for those who will be disenrolled this summer — and neither do the Senate nor Assembly’s proposals.

The Senate proposed a new commission to make a plan by July outlining paths forward for the state’s health care system after cuts. The Assembly proposed a contingency fund to offset costs for a subset of Essential Plan enrollees it is legally required to cover. That fund would not support the large swath of recipients set to lose coverage.

“It’s stunning that the [proposals] do nothing for the 470,000 people set to lose Essential Plan coverage in July,” said Michael Kinnucan, senior health policy adviser at the Fiscal Policy Institute. The left-leaning group has been urging the state to set up a state-funded alternative for those kicked off the Essential Plan and called the omission by lawmakers “negligence.”

Kinnucan also expressed concern about legislators’ proposed Medicaid reimbursement rates, which are higher than those recommended by the governor. In previous years, Kinnucan has advocated for a more targeted approach to reimbursement rates to account for disparities among health care facilities. The health sector has been lobbying for rate increases to keep up with rising costs and account for blowback from federal cuts, which are expected to drive up the number of uninsured patients.

Rising reimbursement rates have long been flagged by the fiscally conservative Empire Center as a major contributor to the growing cost of New York’s Medicaid program. Pressure to rein in these costs could escalate under the Trump administration, which announced earlier this month that it would be launching a probe into the state’s health care spending.

“Going with another round of rate increases is a sign they’re not taking that issue seriously,” Bill Hammond, senior fellow for health policy at Empire, said of all three budget proposals. “I think they’re setting themselves up for real problems for the future.”

Neither legislative proposal specifically addressed upcoming changes to Medicaid eligibility. In October, federal funding for some immigrants enrolled in Medicaid will dry up, and the state will have to start implementing new work requirements for recipients starting in January. The changes are expected to result in an additional hundreds of thousands New Yorkers losing their coverage.