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STATE BUDGET
Democratic Gov. Kathy Hochul’s firm opposition to raising taxes has been replaced by hedging. Hochul is facing a consequential decision ahead of her January budget presentation: whether to back tax hikes and use the revenue to fund New York City Mayor-elect Zohran Mamdani’s expensive agenda. The governor and incoming mayor are supportive of creating a phased-in universal child care program — a popular idea the 34-year-old democratic socialist pressed for during his campaign and one Hochul can embrace with little political downside. Creating such a program, however, is costly. Hochul has opposed Mamdani’s preferred revenue raisers: increasing the personal income tax on people making $1 million or more and hiking the state’s corporate tax rate. But last month, she signaled her views on taxes were changing. Uncertainty at the federal level has altered her calculus, and the governor pointedly did not rule out a levy increase. Her comments came as state officials started to explore a potential corporate tax rate increase while Hochul prepares her budget plan.
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ACCESS TO CARE
NY Focus published a good article about the Essential Plan, and specifically the New Yorkers impacted by coming changes. NYS has applied to the federal government to drop the Essential Plan (because they won’t be able to run the program due to the loss of federal funds) to revert back to the Basic Health Program. This article brings the human impact to bear through the story of a New York couple in the Hudson Valley.
Health Care Sticker Shock Coming for 450,000 New… | New York Focus
Health Care Sticker Shock Coming for 450,000 New Yorkers
Federal budget cuts will force hundreds of thousands off New York’s free Essential Plan, with some families facing $10,000 annual premium increases.
Clara Hemphill · December 1, 2025, NY Focus
A decade ago, Obamacare made it possible for Elizabeth and John to build a small business in the Hudson Valley: a fitness center for children and adults that now has 200 students. The husband-wife team was able to give up jobs that came with health insurance and buy “marketplace” insurance with subsidies from the Affordable Care Act. They later switched to the Essential Plan, a generous state program that offers free insurance to 1.7 million low- and middle-income New Yorkers.
Now, changes to the ACA — driven by Washington budget cuts — are expected to drive up John and Elizabeth’s health insurance costs by more than $10,000 a year.
They’re among the hundreds of thousands of New Yorkers who will face sharply higher premiums in 2026 due to the stalemate in Washington over federal subsidies, the tax and spending plan Republicans passed in July, and Hochul’s plan to minimize damage to the state budget while protecting low income, legal immigrants who will lose federal subsidies.
“I don’t like what’s going on in Washington, holding our health care hostage,” said Elizabeth, who, along with her husband, asked to be identified by their middle names to protect their privacy. “Small businesses rely on the affordability of insurance to keep going.”
Higher premiums are just the beginning of an expected widespread disruption to New York’s health care system over the next two years as Washington’s budget cuts take hold. Even more dramatic are the policy changes in store for January 2027, when work and extra eligibility requirements will kick in for the state’s 6.8 million Medicaid recipients.
The state Department of Health estimates these changes will result in 1.5 million people losing coverage.
“It would erase most of the progress we’ve made since 2010,” said Michael Kinnucan, director of health policy for the Fiscal Policy Institute, a liberal think tank.
New York state has been creative in using the complex regulations of the 2010 Affordable Care Act to offer free and low-cost health care to millions of its citizens and legal immigrants. In fact, 44 percent of New Yorkers are enrolled in state-sponsored coverage. Fewer than 5 percent of New Yorkers are uninsured, down from 12 percent in 2010.
Now, those gains are threatened by a series of changes to the ACA that Republicans passed in the One Big Beautiful Bill Act.
The debate is still raging in Washington over whether to extend Covid-era subsidies designed to keep health insurance costs low for some 24 million Americans. The government shut down for 43 days over Democrats’ demand to extend the subsidies beyond December 31 — and Republicans’ refusal to do so. Eight Democrats agreed on November 10 to vote with Republicans to reopen the government after Senate Majority Leader John Thune agreed to put the matter to a vote in mid-December. The outcome is uncertain.
But only 140,000 New Yorkers, or less than one percent of the state’s population, receive these subsidies to buy private insurance on the Obamacare marketplace. That’s because New York has been more generous than most states offering free or low-cost care through Medicaid and the Essential Plan. In New York, most people who would otherwise buy insurance on the marketplace get free insurance through these programs instead.
Whatever happens in Washington, 450,000 low and middle-income New Yorkers — including Elizabeth and John — will face sharply higher premiums or lose their health insurance entirely on July 1, 2026, as the state grapples with the budget cuts Republicans in Congress approved last July.
Elizabeth and John have always considered health insurance essential. Elizabeth has autoimmune and blood disorders that need regular monitoring and is at high risk for cancer.
John had long dreamed of being a personal trainer. He started with a few clients in 2010, but continued working his his full-time job as a newspaper photographer so he could keep his health insurance. That insurance was particularly important after their first child was born and Elizabeth was laid off from her full-time job.
“The business was successful and started to grow,” Elizabeth recalled. “But there was always that thing hanging out there: you need your corporate job for health insurance. Before ACA, it was much more difficult for a family business to get insurance. The premiums were high and the coverage was pretty lame.”
That changed in 2014, when the Affordable Care Act established marketplaces where individuals could shop for insurance. It also subsidized the cost of monthly premiums with tax credits — making insurance affordable for small businesses and self-employed people.
With the help of a broker, Elizabeth and John found a plan that worked for them. John could quit his job and devote his energies to his business full-time. Elizabeth could continue working part-time.
The monthly premiums for Obamacare were high at first — about $1,600 a month. But those costs decreased as the couple’s broker helped them shop for the best plan. Their premiums decreased further after Congress expanded the tax credits during the Covid epidemic in 2021.
By 2023, they were paying about $600 a month with a $2,000 annual deductible for a “silver” plan — not the cheapest “bronze” plan, not the priciest “gold” plan. It seemed to be better and cheaper coverage than they had with insurance from their employers.
Then, in 2024, their broker informed them they were eligible for insurance with no monthly premiums and no deductibles under the state’s Essential Plan.
The ACA gave states big financial incentives to enroll more people in Medicaid — not just the very poor, but those nearing poverty as well, including many people in low-wage jobs. This expansion now covers more than 2 million of New York’s 6.8 million Medicaid recipients, whose incomes go up to 138% of the poverty level: $21,597 for a single person or $36,777 for a family of three.
The ACA allowed New York to create its own plan, known as the Essential Plan, with federal dollars that otherwise would help pay for marketplace insurance.
The Essential Plan covers students who work part-time in retail sales, non-unionized construction workers, house cleaners, people who work irregular hours, and people who piece together several part-time jobs. It also covers 725,000 legal immigrants who don’t qualify for Medicaid under federal rules that limit enrollment to permanent residents who’ve had a green card for at least five years.
Curiously, the Essential Plan has generated a budget surplus. That’s because the state was able to provide care for less per person than the equivalent amount the federal government was giving in tax subsidies for private insurance.
It costs less to treat younger and healthier people than older and sicker people. And, if you offer insurance for free or almost free, lots of young and healthy people sign up. The federal government’s subsidies were based on the cost of private insurance for an older, sicker population, so the state had money left over.
Faced with a surplus, the state expanded eligibility for the Essential Plan in 2024 to people making up to 250 percent of poverty, or $39,125 a year for a single person and $94,125 for a family of five. Elizabeth and John, who have three children, learned that they qualified for the state’s plan — no monthly premiums and no deductibles.
“I have to say, if the Essential Plan is what Medicare- or Medicaid-for-all looks like for Americans, then we should all do it right now,” Elizabeth said. “Nobody should blink an eye.”
At her doctor’s recommendation, Elizabeth had her fallopian tubes removed to reduce her high risk of ovarian cancer. “I probably wouldn’t have done it if it had cost me $3,000, right? I paid a couple of hundred bucks, which I think in the long-term saves a lot of people a lot of trouble. If I don’t get cancer, I don’t cost the system millions of dollars.”
But Elizabeth and John’s good luck with low-cost health insurance is about to come to an end. In July, Hochul plans to scale back eligibility for the Essential Plan to make up for the money the state is losing in federal reimbursements. The couple will then go back to the Obamacare marketplace to shop for insurance — and they’ll likely pay much higher rates than they paid in 2023.
The Republicans’ budget bill, passed in July, put new restrictions on who is eligible for federal subsidies on the ACA marketplace — money that the state uses to fund the Essential Plan. Contrary to Republican claims, undocumented immigrants have never been eligible. But the new law also bans legal, permanent residents who have had their green cards for less than five years. That includes most of the 725,000 legal immigrants covered by the Essential Plan.
This puts New York state in a bind. Under a 2001 state court order, New York is obliged to offer health insurance to low-income legal immigrants. Without federal funding, the state would have to pick up the entire tab for their care.
Hochul came up with a plan to preserve coverage for the poorest people in the Essential Plan — including nearly all of the legal immigrants — by rolling back eligibility for those who gained coverage in 2024. That includes middle-class families like Elizabeth’s and John’s.
In September, Hochul proposed reducing the income limit for the state’s free plan from 250 percent to 200 percent of poverty, $31,300 for a single person or $53,300 for a family of three. Families who lost coverage on the Essential Plan would be eligible to buy insurance on the marketplace, but the costs would be much higher.
Hochul’s plan, which must be approved by the federal government, would allow the state to use $8.9 billion in federal funds now held in a trust fund. This money has accumulated because the federal funding formula generated more money than the costs of the Essential Plan.
Elizabeth doesn’t know exactly what her family’s premiums will cost when they return to the marketplace in July, but the state’s online calculator suggests families in her income range will pay premiums of about $900 a month for a silver plan — or $10,800 a year — with a deductible of $2,400. That’s about a 50 percent increase over what they paid in 2024 and a giant increase over their nearly-free insurance under the Essential Plan.
“We’ll cross the bridge when we come to it,” she said with a sigh when asked how she would manage. “That’s all you can do.”
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| THE NEXT CRIMINAL JUSTICE FIGHT IN ALBANY: RAISE THE AGE
First in Playbook, the state’s NAACP conference, the New York Civil Liberties Union, the Legal Aid Society, VOCAL-NY and 216 other organizations from around the state are banding together to create the “Protect Raise the Age” coalition — which aims to protect the 2017 law that ended the practice of charging minors in the state’s adult criminal courts. The group is forming one year after the governor emerged successful in a hard-fought battle to make changes to criminal discovery laws in the state, which district attorneys in the state argued were needed to stop a sharp rise in criminal case dismissals in the city. Those reforms were separate from age-related concerns, but any changes to the Raise the Age Act could play into the governor’s broader focus on criminal justice reform. And it’s all coming together as the governor enters her reelection year, where she will have to defend herself from repeated attacks from Republican Rep. Elise Stefanik, who has already tried to paint her as “pro-criminal” and a supporter of 2019 bail reforms that became a vulnerability for New York Democrats during the 2022 House and governor’s races. “New York families are less safe due to the Worst Governor in America’s dangerous defund the police, pro-criminal failed policies,” Stefanik posted to X in May alongside a link to an article that reviewed a September report from Mayor Eric Adams showing a major jump in youth felony arrests since Raise the Age was passed. This year’s battle is shaping up to be similar to last year’s discovery fight, with district attorneys and criminal justice advocates expected to go toe-to-toe over whether to change or maintain a significant pre-covid criminal justice policy. “There’s no evidence that rolling back Raise the Age will make New Yorkers safer,” said Rob DeLeon, the deputy CEO at The Fortune Society, one of the many organizations comprising the Protect RTA-NY coalition. “What’s clear is that treating children like adults has never reduced crime. It only deepens trauma, fuels recidivism and destabilizes communities.” The group already met with lawmakers this morning to gin up support for the cause, and it’s launching a paid ad and media campaign on social media and digital platforms to stop any changes to the law. The coalition would not say how much money is behind the effort. Before Raise the Age’s passage, New York and North Carolina were the last two states in the country still charging 16- and 17-year-olds as adults. The reform was signed by then-Gov. Andrew Cuomo, who was able to get the bill over the finish line when Republicans controlled the Senate. Assembly Speaker Carl Heastie also championed the legislation. The law didn’t just change the age of criminal responsibility — it also set aside hundreds of millions of dollars to be allocated annually to youth programming and violence prevention efforts that lawmakers argued were needed to keep kids out of the criminal justice system. But, that never really happened. As POLITICO reported early this year, since Raise the Age went into effect in 2018, over $980 million allocated to localities for the program has gone unused — all while the juvenile justice system remains strained, including by a severe shortage of juvenile detention beds. Mary Pat Donnelly, president of the District Attorneys Association of the State of New York, told POLITICO in a statement that state’s district attorneys already plan “to work with our legislature and our Governor to offer solutions that address some of the shortcomings in the law and also adequately tackle the rise in youth gun violence across our state.” “Every day in counties all over the state we see limitations of Raise the Age and inconsistencies in how it is interpreted,” Donnelly, who also serves as the Rensselaer County District Attorney, said in a statement. “Any changes to Raise the Age should be consistent with the original intent of the law and should focus both on the rehabilitation of adolescent offenders and community safety. The time has come to examine Raise the Age and identify possible changes that will improve youth justice, address violent crimes committed by youths and mitigate recidivism.” Hochul’s office declined to preview its plans for Raise the Age ahead of her January State of the State speech, where she will roll out her major session goals for the year. But she has so far signaled a willingness to consider changing the law. “I’m willing to look at options that make New York State safer,” she told reporters in August, adding that she wants “to make sure that we’re using that money, those resources, to ensure that there are other options for young people in our cities to not be persuaded to join a gang as an alternative family.” “I’m not going to excuse any crime because I really believe that we need to be standing up for victims,” she also said. “I am that champion of our victims, but I’m also willing to look at options to make New Yorkers safer.” — Jason BeefermaN (POLITIC0, 12/2) |
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FEDERAL: ACA Tax Credit Subsidies Fight
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RESOURCES
The New York State (NYS) Department of Health Office of Health Insurance Programs (OHIP) is pleased to announce that applications are now open for the Healthcare Access Loan Repayment (HEALR) program, a $48.3 million Medicaid workforce initiative authorized under New York’s 1115 Demonstration Waiver aimed at strengthening the capacity of New York’s health care workforce and assisting health care professionals in high-need roles with their student debt.
Health care providers who are awarded loan repayment through the program must make a four-year, full-time commitment to maintaining a personal practice panel or working at an organization that serves at least 30 percent Medicaid members and/or uninsured individuals. Organizations that are contracted with a state-designated Social Care Network and providing health-related social needs screening, referrals and/or services also qualify. Maximum loan repayment awards for each title are as follows:
- Psychiatrists – Up to $300,000 per awardee
- Dentists and Primary Care Physicians – Up to $100,000 per awardee
- Nurse Practitioners and Pediatric Clinical Nurse Specialists – Up to $50,000 per awardee
With just a four-year commitment to serve New York’s Medicaid and uninsured populations, you can ease your debt burden and help improve health care for New Yorkers!
There are two application pathways: individual providers may apply on their own, or employers that have been approved as service commitment sites may initiate up to five applications on behalf of their staff. Individual and employer applications can be accessed on the NYS Department of Health “Healthcare Access Loan Repayment (HEALR) Program” web page.
Applications for the HEALR program are open now. Employer applications are due at 11:59 p.m. on Saturday, January 31, 2026, and individual applications are due at 11:59 p.m. on Sunday, February 15, 2026. Awards will be announced in late spring 2026. Further details regarding the award decision process, including anticipated timelines and subsequent steps, will be communicated to applicants following the close of the application period. Awards are limited; those interested in participating in the program are encouraged to submit their applications as soon as possible.
OHIP will host an informational webinar on Thursday, December 18, 2025 for individuals and employers interested in participating in the HEALR program. Webinar registration information, applications, additional program details, and eligibility requirements are available on the NYS Department of Health “Healthcare Access Loan Repayment (HEALR) Program” web page. Please email HEALR@health.ny.gov with any questions about the HEALR program.
Whether you are a health care provider, employer, advocate, or community leader, your involvement can have a significant impact and help to maximize the HEALR program’s reach. We encourage you to share this opportunity with your network to help us spread the word. Thank you for your continued commitment to our health care workforce. Together, we can make a difference!
Thank you,
Medicaid Redesign Team (MRT) Updates
New York State Department of Health
Office of Health Insurance Programs
99 Washington Ave, Albany, NY 12237
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OCTOBER 2025 DoH MEDICAID UPDATE
Dear Medicaid Update Recipient,
The Office of Health Insurance Programs of the New York State Department of Health has approved the release of the October 2025 Medicaid Update. Please find the print-ready version of the issue available for download at: https://health.ny.gov/health_care/medicaid/program/update/2025/docs/mu_no10_oct25_pr.pdf.
You may also go straight to an article or topic that pertains to you by selecting from the current issue’s table of contents below.
All Providers
- Section 504 of the Rehabilitation Act of 1973 Final Rule (Cover)
- Attention New York State Medicaid Public Transit Automated Reimbursement Providers: MetroCard Phase-Out
- Reminder: Health Home Consent Forms
Policy and Billing
- Updated Implementation Date: Ambulatory Patient Group Weight Adjustment for Phosphate Binders
- Drugs Administered by Practitioners: New York State Medicaid Fee-for-Service Clinical Criteria Worksheets
- Casgevy™ (exagamglogene autotemcel) and Lyfgenia® (lovotibeglogene autotemcel): Centers for Medicare and Medicaid Services Cell and Gene Therapy Access Model
Pharmacy
REMINDER: Please notify us immediately if your email address changes so that we may continue to keep you updated on current Medicaid policy guidelines and bulletins. It is the responsibility of each provider to alert Medicaid of any address or email changes as soon as they occur. Please send your new information to MedicaidUpdate@health.ny.gov. We thank you for your continued feedback.
Thank you,
Medicaid Update
New York State Department of Health
Office of Health Insurance Programs
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DEA Plans Additional Extension of COVID flexibilities for Telemedicine Prescribing of Controlled Substances
A new rule posted on the Office of Management and Budget (OMB) registry suggests that the US Drug Enforcement Administration (DEA) is planning an additional extension of COVID-19-era flexibilities for telemedicine prescribing of controlled substances beyond the current expiration date of December 31, 2025.
The new rule is entitled Fourth Temporary Extension of COVID-19 Telemedicine Flexibilities for Prescription of Controlled Medications and is not yet available for public review. Rules must clear OMB review before being published in the Federal Register; there is no minimum period for this review.
In Depth
Why it matters
- The flexibilities were invoked in March 2020 in response to the COVID-19 public health emergency (PHE) and allow prescribing of controlled substances via telemedicine without an initial in-person visit.
- The current telemedicine flexibilities regarding prescribing controlled substances are set to expire December 31, 2025, without further action by the DEA or Congress.
- In November 2024, the DEA provided the most recent extension of the flexibilities through December 31, 2025, stating that the extension would give the agency time to promulgate proposed and final rules on telemedicine prescribing and “ensure a smooth transition for patients and practitioners that have come to rely on the availability of telemedicine for controlled substance prescriptions.”
- On January 15, 2025, in the final days of the Biden administration, the DEA released a proposed rule that would establish three special registrations, creating pathways for telehealth practitioners to prescribe – and online platforms to dispense – certain controlled substances via telemedicine after flexibilities expire on December 31, 2025. To date, the Trump administration has not moved forward with finalizing the proposed approach for special registration.
- Patients and providers are likely to welcome an extension, as they have been operating in a highly uncertain environment.
- Any extension would provide additional time for stakeholders to engage with policymakers.
Background
Under the Ryan Haight Act of 2008, a telemedicine provider is required to perform an in-person medical evaluation of a patient prior to prescribing a controlled substance (with certain limited exceptions). However, the flexibilities invoked in March 2020 in response to the COVID-19 PHE allow for prescribing controlled substances via telemedicine without an initial in-person visit. The current extension of the flexibilities, pursuant to a November 2024 rule, authorizes all DEA-registered practitioners to prescribe Schedule II – V controlled medications via telemedicine without an initial in-person examination through December 31, 2025.
Stakeholders had hoped that the DEA would permanently adopt flexibilities for telemedicine prescribing of controlled substances after the PHE, including finally adopting a special registration process. In February 2023, the DEA and the Substance Abuse and Mental Health Services Administration proposed two rules: the general telemedicine rule and the buprenorphine rule. The two proposals would have established additional potential pathways for prescribing certain controlled substances in limited quantities via telemedicine without an initial in-person medical examination while also imposing detailed recordkeeping requirements. Notably, the proposed rules did not include a special registration process for telemedicine providers.
The DEA received a record 38,000 comments in response to the February 2023 proposed rules, including comments from federal lawmakers. Many stakeholders pointed out that the requirement for an in-person evaluation would make it more challenging for certain patients (those facing significant barriers to accessing care without telemedicine) to continue receiving the controlled medications they need. Subsequently, the DEA issued temporary rules extending the telemedicine flexibilities through December 31, 2024, and stated that it anticipated releasing a final rule addressing telemedicine prescription of controlled substances in fall 2024. In November 2024, the DEA further extended the flexibilities through December 31, 2025, stating that the extension would give it time to promulgate proposed and final rules on telemedicine prescribing and “ensure a smooth transition for patients and practitioners that have come to rely on the availability of telemedicine for controlled substance prescriptions.”
In January 2025, the Biden administration released a proposed rule entitled Special Registrations for Telemedicine and Limited State Telemedicine Registrations, which addressed the long-awaited pathway for a telemedicine special registration. The proposed rule sought to establish three special registrations, creating pathways for telehealth practitioners to prescribe – and online platforms to dispense – certain controlled substances via telemedicine. The proposed rule would also impose detailed requirements for practice standards, prescription information, and documentation, including requirements related to prescription drug monitoring program checks, use of audio-video technology, restrictions on Schedule II controlled substances, data reporting to the DEA, identity verification, clinician credentialing, and record retention. It remains unclear whether the Trump administration will move forward with the proposed rule.
Next steps
With the expiration of the current telemedicine flexibilities looming, the new rule is an indication that the DEA will further extend the telemedicine flexibilities. Because the text of the new rule will not be publicly available until it clears OMB review, it is unclear how long such an extension would be and whether there are any limitations on the extension.
Please contact the authors of this article or your regular McDermott Will & Schulte lawyer with any questions
(Source: Mcdermott, Will & ScholTE, 11/18 via National Council, 12/1)