NYHealth Comments on New York State’s Request to Terminate the Section 1332 State Innovation Waiver and Return to the Basic Health Program

NYHealth submitted the following comments supporting New York State's decision to terminate its Section 1332 State Innovation Waiver and return to the Basic Health Program (BHP) in response to catastrophic federal funding cuts to the Essential Plan.

October 10, 2025

Danielle Holahan

Executive Director

New York State of Health

Attn: 1332 Waiver

Empire State Plaza

Corning Tower, Room 2580

Albany, NY 12237

RE: New York State's Request to Terminate the Section 1332 State Innovation Waiver and Return to the Basic Health Program

Dear Commissioner McDonald and Executive Director Holahan,

The New York Health Foundation (NYHealth) appreciates the opportunity to comment on the New York State Department of Health's decision to terminate its Section 1332 State Innovation Waiver and resume operation of the Basic Health Program (BHP) under Section 1331 of the Affordable Care Act.

NYHealth is a private, independent, statewide foundation dedicated to improving the health of all New Yorkers-especially people of color and others who have been historically marginalized. Since our inception, NYHealth has shared a goal with the State: to expand health insurance coverage to all New Yorkers. We have invested millions of dollars to do so and have proudly partnered with the State on many initiatives, including the development of the Essential Plan. Most recently, we partnered with the State during the unwinding of the pandemic-era continuous enrollment provision to help ensure that as many New Yorkers as possible maintained coverage.

The recently enacted federal budget (H.R. 1, Public Law No: 119-21) represents a devastating reversal of decades of progress in coverage expansion and threatens New York's historic coverage rates. Due to changes in premium tax credit eligibility, the State stands to lose $7.5 billion annually in funding for the Essential Plan alone, threatening coverage for 1.7 million New Yorkers. H.R. 1 will also cause massive funding losses for hospitals, community health centers, and food assistance programs. We have joined with fellow philanthropies in calling this law disastrous-it will deeply harm the health and wellbeing of the people we serve for a generation, leaving people poorer, sicker, and hungrier.^[1]

We support the State's request to terminate its 1332 waiver and return to the BHP in response to these catastrophic funding cuts.

New York is confronting the painful consequences of H.R. 1 with clarity and resolve. Faced with no good choices, the State has opted to terminate the 1332 waiver and return to the BHP to preserve coverage for as many New Yorkers as possible. Absent federal action to eliminate or delay the cuts to the Essential Plan, we concur that returning to the Basic Health Program is the most viable path forward. Nonetheless, roughly 450,000 New Yorkers who have benefited from the 1332 waiver's expansion will lose access to zero-premium comprehensive health insurance.

NYHealth remains committed to working with the State and other stakeholders to mitigate these coverage losses and ensure an orderly transition in the coming months. New York is doing what strong leadership requires: making hard choices to protect as many people as possible and limit the damage of reckless federal policy, and we stand ready to partner to develop solutions.

Sincerely,

David Sandman, Ph.D.
President and CEO
New York Health Foundation

References

[1] Kuhlenbeck M, Sandman, D, OBrien-Suric N. Joint Statement: New Budget and Tax Law Threatens Health of New Yorkers. 2025. https://nyhealthfoundation.org/2025/07/08/joint-statement-budget-cuts/?utm_source=JULY+2025+Statement+Joint&utm_medium=email&utm_campaign=JULY+2025+Statement+Joint, accessed October 2025.