New York's Essential Plan Faces Uncertain Future Amid Federal Funding Cuts

Nearly 2 million New Yorkers rely on the Essential Plan, but $7.5 billion in federal budget cuts threaten the program's viability.

Published on Feb. 17, 2026

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Nearly 2 million people who rely on New York's publicly funded health coverage, the Essential Plan, are facing an uncertain future as federal budget cuts threaten to destabilize the program. To mitigate potential cuts, Gov. Kathy Hochul is working on a way to protect the coverage, including potentially lowering the income threshold for Essential Plan recipients.

Why it matters

The Essential Plan is a critical lifeline for low-income New Yorkers who do not qualify for Medicaid or Child Health Plus. The program's dependence on federal funding streams makes it vulnerable, and cuts could negatively impact access to affordable, preventive healthcare, especially for those with complex medical needs.

The details

Federal cuts to New York's Essential Plan total $7.5 billion, more than half of the program's annual funding. State officials estimate that 450,000 people will lose their Essential Plan coverage as early as July. To preserve coverage for 1.3 million New Yorkers, Hochul has directed the Department of Health to submit an application to the Centers for Medicare and Medicaid Services (CMS) to return the Essential Plan to a Basic Health Program, which would lower the income threshold for recipients from 250% to 200% of the federal poverty line.

  • In September 2026, Gov. Hochul directed the Department of Health to submit an application to CMS to return the Essential Plan to a Basic Health Program.
  • As early as July 2026, an estimated 450,000 people are expected to lose their Essential Plan coverage due to the federal budget cuts.

The players

Kathy Hochul

The governor of New York who is working to protect the Essential Plan coverage for New Yorkers.

Centers for Medicare and Medicaid Services (CMS)

The federal agency that would need to approve Hochul's proposal to return the Essential Plan to a Basic Health Program.

Michele Quigley

The CEO of Metro Community Health Centers in New York City, which provides services for patients with intellectual and developmental disabilities, their families, and the community, many of whom rely on the Essential Plan.

Matthew Bernardo

The president of Housing Works, an organization that fights for people living with HIV/AIDS to have access to housing, healthcare, and other resources, who says the Essential Plan is critical for keeping HIV treatment continuous and people virally suppressed.

Mario Soliman

A pharmacist at VineRx pharmacy in Staten Island who says the Essential Plan has become unaffordable for many New Yorkers, with high co-pays and prescription costs.

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What they’re saying

“Access to affordable, high-quality health care is essential to New York families. While Washington cuts and destabilizes care, New York will continue investing in patients, providers, and protections to ensure health remains accessible across the state.”

— Kathy Hochul, Governor of New York (amNewYork)

“Preserving and strengthening New York's Medicaid and Essential Plan coverage is not only sound public health policy; it's fiscally responsible in providing community-based care.”

— Michele Quigley, CEO of Metro Community Health Centers (amNewYork)

“For people living with HIV, the Essential Plan is what keeps treatment continuous and people virally suppressed. When coverage is cut, care is disrupted, people fall out of treatment, and they come back sicker—often through emergency rooms. That doesn't save money. It shifts costs onto Medicaid and weakens the safety‑net providers New York depends on.”

— Matthew Bernardo, President of Housing Works (amNewYork)

What’s next

The Centers for Medicare and Medicaid Services (CMS) will need to approve Gov. Hochul's proposal to return the Essential Plan to a Basic Health Program, which would lower the income threshold for recipients.

The takeaway

The potential loss of the Essential Plan coverage for nearly 2 million New Yorkers due to federal funding cuts highlights the program's vulnerability and the critical need to preserve access to affordable, preventive healthcare for low-income individuals and families in the state.