More than 470,000 legally present immigrants in New York could lose their health insurance this summer as state leaders wait for a critical decision from the federal government.
In February, Kathy Hochul released her 30-day amendments to New York’s proposed $262.7 billion state budget. Notably, the updated plan did not include changes that would preserve health coverage for hundreds of thousands of legal noncitizens enrolled in the state’s Essential Plan.
If no action is taken, coverage for this group could end on July 1, 2026.
Why Is This Happening?
The Essential Plan currently provides low-cost health insurance to about 1.7 million New Yorkers. However, changes in a sweeping federal tax and spending law passed under the Trump administration eliminated federal funding eligibility for most legal noncitizens.
In response, New York officials requested approval from the Centers for Medicare & Medicaid Services (CMS) to use surplus funds already within the Essential Plan to maintain coverage. So far, CMS has not issued a decision.
Because of this uncertainty, Governor Hochul’s budget assumes a “worst-case scenario” — that federal permission will be denied.
A Conservative Budget, Real-World Consequences
State Health Commissioner Dr. James McDonald explained that budget planning must rely on confirmed funding, not hopeful outcomes. While the state increased Medicaid spending by more than 11%, no state funds were allocated to replace potential federal losses for immigrant coverage.
State officials emphasize that they expect federal approval eventually, but until that happens, the risk remains very real.
If coverage is terminated, affected individuals would receive at least 90 days’ notice before losing their insurance.
Political Pressure and Legal Uncertainty
Governor Hochul has been urging New York’s Republican members of Congress to advocate for allowing the state to continue coverage using existing federal dollars. Meanwhile, lawmakers in Albany are preparing for intense debate once the State Senate and Assembly release their budget counterproposals.
Some lawmakers have warned that if the federal government rejects New York’s request, the state may pursue legal action to protect coverage for immigrant residents.
State Comptroller Tom DiNapoli has also expressed concern, stating that federal policy changes are putting real people at risk — though he stopped short of endorsing the use of state revenue to fully backfill the program.
What Happens Next?
For now, hundreds of thousands of New Yorkers are left waiting.
If CMS grants approval, coverage could continue uninterrupted. If not, New York will face difficult choices — legal, political, and financial — about how far it is willing and able to go to protect access to health care.
One thing is clear: the outcome of this decision will shape the future of immigrant health coverage in New York and may set a precedent for other states nationwide.