Nearly 500,000 moderate-income New Yorkers lost their health insurance on July 1 when the state’s Essential Plan, a low-cost program created under the Affordable Care Act, ended after federal funding was slashed by the One Big Beautiful Bill Act, also known as HR 1. The law, signed by President Donald Trump almost exactly one year ago, cut government health spending by $911 billion nationally in favor of permanent tax cuts for higher-income families and border security.
The Essential Plan covered New York residents earning between 200% and 250% of the federal poverty level — up to $39,900 for a single person and $66,625 for a family of three. The program had no premiums or deductibles and minimal co-pays. According to New York State of Health, the agency that administered the program, federal funding was cut in half after HR 1’s passage. A provision ending health insurance tax credits for lawfully present immigrants also contributed to the program’s end. State lawmakers failed to approve replacement funding in June.
“It’s an all hands on deck situation,” said Maia Dillane, senior director of strategy and implementation at the Arab-American Family Support Center (AAFSC) in New York City, where the bulk of coverage losses are expected. The AAFSC is one of 20 community organizations working with the Community Service Society of New York to help affected residents find new coverage. People have 60 days from losing coverage to enroll in a new plan or wait until open enrollment in November.
Rahem Bader, director of the community health and well-being program at AAFSC, said many families are struggling with the costs of marketplace plans. “We’re seeing a lot of families still going back and forth on whether they can enroll in one of the qualified health plans — or whether they are just going to opt out of the coverage completely,” Bader said. “Families are having to choose how they’re going to split their costs when it comes to their healthcare, food, etc.”
People losing Essential Plan coverage must shop for health insurance through Affordable Care Act marketplaces that require premiums and deductibles. Rate increases are historically high. In addition to the cuts from HR 1, Congress allowed special government subsidies to health insurers to lapse at the end of 2025, leading to record-high average deductibles of $3,786 per person, according to KFF. Analysts at Georgetown University’s Center on Health Insurance Reforms found that insurers in New York are requesting an average 20.7% rate increase for 2027, with UnitedHealthcare of New York proposing a 52.1% increase.
Dr. Adam Aponte, chief executive of the East Harlem Council for Human Services, which operates the Boriken Neighborhood Health Center, said this is only the beginning of broader coverage losses. “This is just the tip of the iceberg, right – because come January all the other impacts of HR1 start to kick in,” Aponte said. New York City is expected to be hardest hit, with more than 250,000 city residents losing insurance, including 200 of Aponte’s own patients.
Health policy analysts at the Kaiser Family Foundation predict that as many as 1.1 million New Yorkers could lose health insurance statewide through 2034 when other provisions of HR 1 are taken into account. Nationally, the law could cause an additional 10 million people to become uninsured over the next decade, largely due to new work requirements for some Medicaid beneficiaries, which analysts say will be difficult to navigate and expensive to administer.
“What do these folks turn to?” Aponte said. “Federally qualified health centers like ours are going to be likely to absorb these individuals as uninsured patients into our organizations.” He said many newly uninsured people will likely seek care in emergency departments.
The Congressional Budget Office estimates that HR 1 will add $3.4 trillion to the federal budget deficit by 2034, largely due to reduced revenue from tax cuts. Despite calls for the state to step in, New York lawmakers in June did not provide funding to continue the Essential Plan.