by Annette Pinder

Primary federal legislation and policy changes are leading to significant cuts and modifications to Medicaid and Child Health Plus (CHP) in New York, causing billions of dollars in funding reductions and potentially resulting in hundreds of thousands of people losing coverage. The main cause of these cuts is the “One Big Beautiful Bill” (OBBBA), federal legislation passed in mid-2025. Key provisions of OBBBA include:

  • Funding cuts: More than half of the budget for New York’s Essential Plan is being reduced, which could affect over two million low-income residents.
  • Reduced matching rates: The federal matching rate (FMAP) will be lowered for states that provide coverage to undocumented immigrants.
  • Work requirements: New work mandates will be enforced for certain Medicaid recipients starting in 2027.
  • Frequent renewals: Starting in late 2026, states will need to conduct eligibility redeterminations for some adults every six months, which may increase the risk of procedural disenrollment for those who remain eligible.
  • Shorter Retroactive Coverage: Beginning January 1, 2027, the period for retroactive medical bill coverage will be reduced.

In response to the federal cuts, New York is taking some mitigation measures, but significant impacts are still expected.

  • Shift from Essential Plan to Basic Health Plan: The state plans to move 1.3 million people from the Essential Plan to the Basic Health Plan by July 1, 2026, to protect their coverage from federal policy changes. This mainly impacts low-income individuals who do not qualify for Medicaid, including many legally present immigrants.
  • Continuous Child Coverage: New York has received federal approval to provide continuous Medicaid and Child Health Plus (CHP) coverage for children up to age six, regardless of household income changes. However, the federal government has indicated it will not renew this waiver in 2027, risking coverage for over 750,000 children in New York.

What this means for New Yorkers:

  • Potential coverage loss: The combination of federal cuts and policy changes could cause many New Yorkers to lose their health coverage.
  • Turbulence ahead: Advocacy groups predict that the policy changes will likely present significant challenges during the 2026 budget process.
  • Impact on hospitals and providers: Federal and state actions could cause hospital closures, especially among safety-net hospitals that serve vulnerable populations, and lead to job losses for healthcare workers.
  • Increased uninsured rates: Experts project that federal cuts could cause millions of Americans to lose their insurance.

For questions about Medicaid and CHIP, contact the NY State of Health Customer Service Center. For direct assistance, call 1-855-355-5777 (TTY: 1-800-662-1220).