Governor Hochul Secures Historic Investments to Bolster New York’s Healthcare System and Protect the Health and Well-Being of All New Yorkers as Part of the FY27 Budget

Governor Kathy Hochul today announced significant investments to strengthen New York's healthcare system as a part of the FY27 Enacted Budget that will increase efficiency and lower costs for New Yorkers. The Governor's initiatives include significant investments to bolster the state's critical healthcare providers, makes further investments in the Safety Net Transformation Program, implements new technological advancements to improve quality of care and further advances health equity across the state.

"Access to high-quality health care that's affordable for New Yorkers must always be a top priority," Governor Hochul said. "While Washington Republicans continue their relentless attempts to undermine our healthcare system, this Budget will ensure the state remains a national leader in providing the quality healthcare New Yorkers can trust."

Strengthening the Healthcare Delivery System

Investing in Critical Healthcare Services

In addition to normal operational stresses facing healthcare providers, the health sector has been a target for recent federal cuts, including those advanced as part H.R. 1. To support hospitals, nursing homes, and assisted living programs during these uncertain times, the Budget will include an additional $1.5 billion in State support for these critical institutions, in addition to $1 billion in investments that are continued from last year's Budget.

This includes nearly $1.4 billion in new and recurring investments to support New York's critical hospital infrastructure reimbursement increases and programs that incentivize quality of care.

Additionally, the Budget provides over $950 million in new and recurring investments to support Nursing Homes and Assisted Living Programs that provide care to some of our neediest populations.

In addition, this Budget provides $80 million in investments in Federally Qualified Health Centers, which are on the front lines of providing care to the State's uninsured and underinsured.

Expanding the Safety Net Transformation Program

Safety net hospitals care for the most vulnerable New Yorkers, but face serious challenges in maintaining financial resilience and stability. To address this, Governor Hochul established the Safety Net Transformation Program, providing financial support and regulatory flexibility to encourage strategic partnerships that strengthen these hospitals. Since its passage, Governor Hochul has awarded more than $4.4 billion to support 14 partnerships across the state.

This year, Governor Hochul secured $1.3 billion in additional capital and operating funding to continue supporting new and existing projects under the program. In addition, the Governor secured special focus areas including partnerships that focus on regional planning to improve coordination of care and reduce duplication of healthcare services, and partnerships that utilize AI to improve efficiency and quality of care.

The Enacted Budget also provides $500 million in additional funding for the Vital Access Provider Assistance Program (VAPAP), to support distressed facilities that are experiencing financial emergencies, and they restructure their operations to achieve financial sustainability.

Expanding the Use of Artificial Intelligence Technology in HealthCare Safely and Equitably

The use of artificial intelligence (AI) in health care is rapidly advancing with promises to improve operational efficiency and patient care if carefully adopted. It is essential to coordinate AI advancement within the health care delivery system in a way that promotes greater access, quality, and equity in care delivery at a lower cost for all patients.

Governor Hochul will direct the Department of Health (DOH) to establish a consortium of healthcare and AI experts to share data and best practices and strengthen cross-sector collaboration around building, testing, and deploying safe and effective AI tools. This is supported by $1.5 million in the Enacted Budget. To ensure equitable access, Governor Hochul will incentivize partnerships between safety net hospitals and other healthcare partners to implement AI solutions that improve quality of care and strengthen operations. In addition, the State will develop systems to evaluate and launch best-in-class AI tools within DOH, the Medicaid program, and the Office of the Medicaid Inspector General to strengthen program integrity.

Enabling Transformation of the Health Care Delivery System

Healthcare providers are required to follow regulatory requirements, including the Certificate of Need (CON) process, to receive approval for certain healthcare projects. While it is a critical process, it can be time-intensive for both providers and the Department of Health. Governor Hochul has already made progress by streamlining the application and review process for certain projects and significantly raising the thresholds for applications that require a more detailed review.

To reduce the burden further, the Enacted Budget provides $11 million. Governor Hochul will direct DOH to make the CON process more efficient and targeted to improve the experience of providers and expedite important healthcare projects across the state.

Empowering the Healthcare Workforce

Reducing Reliance on Temporary Staff To Stabilize New York's Health Care Workforce

During the Covid-19 pandemic, reliance on temporary staff and traveling nurses skyrocketed. Years after the height of the pandemic, this reliance continues. In 2024, health care facilities paid temporary staffing agencies more than $2.6 billion, and the agencies kept $1 billion of that in profits. And these are not always workers coming on temporary assignment from other states. New York residents make up 72 percent of the temporary workforce, and the majority of these New York residents permanently live within 25 miles of their "temporary" work location.

Governor Hochul's plan will ensure healthcare dollars are supporting the delivery of care and not middlemen. In addition, the Governor will direct the Department of Health to develop guidance and share best practices to ensure healthcare organizations have the information they need to secure temporary staff when it is necessary.

Improving Healthcare Coverage, Access and Affordability

Defending New Yorkers' Access to Quality, Affordable Health Coverage

Despite achieving one of the lowest uninsured rates in the nation, recent federal actions threaten the continued affordability and accessibility of health coverage in New York. Federal cuts to New York's Essential Plan totaling $7.5 billion, more than half of the program's annual funding, endanger the program's continued viability. The expiration of federal enhanced premium tax credits in 2025 means that 140,000 New Yorkers are paying 40 percent more for premiums this year. Taken together, these federal policies are poised to roll back more than a decade of progress in bringing affordable health coverage to New Yorkers.

To mitigate the worst impacts of these devastating federal cuts, Governor Hochul directed the Department of Health to return the Essential Plan to a Basic Health Program, a move that was approved by the Centers for Medicare and Medicaid Services in March and will preserve coverage for 1.3 million New Yorkers for whom the program is a critical lifeline. As part of this request, New York had sought additional authority to smooth the transition for consumers losing coverage, including continuing cost-sharing reductions and extending the special enrollment period, however CMS denied these requests. The Department of Health will continue working with consumers as part of this transition to ensure they are aware of all available options and provide support and assistance in signing up for new coverage.

Reforming Prior Authorizations To Improve Patient Care

New Yorkers seeking timely medical care too often face delays, denials, or disruptions due to opaque insurance review processes, most notably prior authorizations. These processes require healthcare providers to obtain approval from insurers before delivering certain treatments, tests, or prescribing medications. While well intended to control costs and ensure appropriate care, prior authorization has increasingly become a barrier to treatment.

Governor Hochul will expand health care coverage protections for New Yorkers by reforming and creating more transparency in the prior authorization review process. Specifically, she will:

• Require formularies - the lists of medications covered by health insurance plans - to be posted not just publicly but clearly via a standard, accessible format.
• Ensure prior authorizations for designated chronic conditions remain valid longer so time isn't wasted on unnecessary reviews for ongoing, stable treatments.
• Expand "continuity of care" - the period insurers must cover out-of-network treatment for new patients - from 60 days for life-threatening conditions or late-stage pregnancy to 90 days for all health conditions and the full postpartum period.
• Expand the data health insurers must report on their claims processes, including how often claims are subject to prior authorization and how often those requests are denied.
• Launch a public education campaign highlighting resources that help both consumers and providers navigate insurance challenges.

These reforms will improve access to care by removing unnecessary administrative burdens on providers and making sure critical care is neither delayed nor denied.

Improving Health Equity & Public Health and Improving Vital Records Access for New Yorkers

New York State maintains millions of vital records dating back to the 1800s, including birth, death, marriage, and divorce certificates, all requiring indefinite preservation and access. However, the current system for retrieving these records is out-of-date and inefficient, creating unacceptable delays and frustration for thousands of New Yorkers seeking their own records. Outdated manual processes and aging storage systems have created a mounting backlog.

Governor Hochul will make overdue technological improvements to the vital records system, launching an effort to digitize records for genealogical requests. Digitized vital records are significantly easier to search, retrieve, issue to requestors and protect from physical deterioration or disaster loss. This will help address the current backlog of over 12,000 genealogical records requests.

In addition, the Department of Health (DOH) will tackle the living records request backlog, and improve operational efficiency for future requests. This will directly reduce customer complaints related to long wait times and enhance customer service with more timely communication and responses.

Strengthening Cardiac Emergency Readiness Across New York State

Sudden cardiac arrest remains a leading cause of death in New York, and survival often depends on whether help arrives in the first critical minutes. While progress has been made in schools and youth programs, many communities still lack widespread CPR training and easy access to automated external defibrillators (AEDs). Governor Hochul will protect New Yorkers by implementing a multi-faceted proposal that equips communities around the state with the tools they need to effectively respond to cardiac emergencies and save lives.

The Governor's plan will significantly strengthen cardiac emergency readiness statewide by building on a successful model pioneered at the University at Buffalo to establish regional training hubs and ensure communities know how to use AEDs and support new, scalable approaches to hands-only CPR education, focused on simple chest-compression techniques for bystanders.

The Governor will also modernize AED regulations to keep communities safe and create New York's first statewide AED registry. This registry will map the precise location of every AED across the state, enabling emergency dispatchers to direct bystanders to the nearest device during cardiac events. The registry can be accessible to the public through a mobile application, so every New Yorker can access their nearest AED if needed. The Governor will also make investments in self-directed CPR-training kiosks and AED placements across the state.

Protecting Young New Yorkers From Harmful Alternative Nicotine Products

Alternative nicotine products like Zyn have proliferated in corner stores across the state, threatening to hook New Yorkers on harmful, highly addictive substances. Governor Hochul's plan requires that these dangerous products be treated like any other tobacco product through a new 75 percent tax on the wholesale price of alternative nicotine products, maintaining the same revenue stream while keeping barriers in place to prevent youth usage and supporting healthier care funding.

Classifying alternative nicotine products as tobacco products within the meaning of the Tax Law integrates these relatively new and largely unregulated nicotine products into the State's tax administration and enforcement mechanisms.

Modernizing Pain Management Guidance and Care

New York has made significant progress in reducing overdose deaths, with provisional data showing approximately a 28 percent decline in 2024 compared to 2023 - the lowest level since before the pandemic. Despite this progress, New Yorkers continue to lose their lives to opioid use. The State's progress reflects expanded harm reduction efforts, including broader access to naloxone and drug testing strips, and increased investment in prevention, treatment, and recovery services.

The health care system can play an important role by standardizing pain management approaches and updating clinical guidelines. Governor Hochul will direct the Department of Health to support providers as they balance effective pain relief with patient safety and ever evolving standards of care. The Department of Health will develop a comprehensive Pain Management and Drug Control Strategy focused on preventing opioid misuse, strengthening prescription oversight, and promoting best practices in pain management across the healthcare continuum.

Protecting Immunization Access

New York's immunization policies rely on federal vaccine schedules that, under the current administration, are becoming less and less anchored in science. This creates uncertainty for schools, health care providers, and New Yorkers in general; it also puts the health of our communities at risk and, in some cases, increases patient costs.

To keep New Yorkers healthy and keep money in their pockets, Governor Hochul signed legislation to ensure New York can set its own immunization standards based on accepted medical science and public health needs. The legislation authorizes the Commissioner of Health, in consultation with recognized medical organizations, to establish immunization requirements that guide school eligibility, clinical practice, and insurance coverage. This will provide clarity for providers and insurers, protect access to vaccines, and strengthen public health statewide.

Protecting Summer Campers from Extreme Weather Threats

Summer camps should be places of joy and community, helping young New Yorkers create lifelong memories and friendship. But as extreme weather events become more frequent and severe, summer camps across the state and country face growing risks from flooding, extreme heat, and other climate-related hazards that threaten the safety of children and staff.

In partnership with the Division of Homeland Security and Emergency Services and local health departments, Governor Hochul will direct the Department of Health to strengthen oversight and preparedness measures for camps at greatest risk, including those located in FEMA-designated floodplains. This effort will help camps to incorporate extreme weather readiness into their annual safety plans and ensure clear evacuation, sheltering, and communication protocols are in place. The State will also issue updated guidance and training to support local health departments in reviewing and enforcing these readiness measures. By improving preparedness before emergencies occur, New York will better protect children, and ensure families can trust that summer camps are equipped to respond to extreme weather events.