On July 1, 2026, important consumer cost-sharing reduction programs will end. This crucial affordability program reduced deductibles and eliminated co-payments for outpatient maternity care and out-of-pocket costs for diabetes-related treatments for individuals enrolled in Qualified Health Plans on the individual market. Fortunately, this transition will not affect the State’s free insulin program for those with State-regulated health coverage, which was enacted through the State budget in 2024.

What is changing?

In March, New York State of Health announced that the Centers for Medicare and Medicaid Services (CMS) approved New York’s request to terminate its Section 1332 Waiver and return to the Basic Health Plan under Section 1331 of the Affordable Care Act. This transition partially mitigates the impact of HR1, known as President Trump’s One Big Beautiful Bill, enacted on July 4, 2025. The transition will preserve health insurance for 1.3 million New Yorkers but terminates free Essential Plan coverage for 444,000 others. As described on HCFANY’s Protect Health Coverage page, the State can pass S9589/A10926, currently pending in the Legislature, to prevent this loss of coverage.

In addition to cutting off coverage for half a million New Yorkers, the termination of the 1332 Waiver also terminates the State’s cost-sharing reduction program, which substantially cut deductibles and eliminated cost-sharing for outpatient prenatal and pregnancy care and diabetes care. Data from New York State of Health’s latest enrollment report for 2025 reveals that these three initiatives saved over 62,000 New Yorkers enrolled in Qualified Health Plans around $50 million in health care costs. Based on claims data, these cost-sharing programs have benefited 3,800 with prenatal and pregnancy care, 26,600 with diabetes care, and reduced deductibles for 41,800 with Marketplace Silver plans. You can see the entire list of prenatal and diabetes services affected here.

The federal government denied the State’s request to keep federal funding to maintain these programs for the rest of the year. The programs instead will end with the transition this coming July.

What is not changing?

Fortunately, insulin will remain available to those with State-regulated health insurance with no cost-sharing. New York became the first in the nation to fully eliminate copayments, coinsurance, and deductible requirements for covered prescription insulin by amending the state insurance law in the State’s FY2024-2025 final budget. This new law went into effect on January 1, 2026. Research shows that eliminating co-payments for some chronic care medications—including insulin—generates more insurance claims savings. This law replaced a 2020 statute that had capped insulin copays at $100 per month. The State subsequently eliminated co-payments for maintenance and emergency inhalers in a law that takes effect on January 1, 2027.

HCFANY hopes the State continues to ensure that New Yorkers have access to affordable, quality care, especially for the half a million New Yorkers who will lose Essential Plan coverage this July due to federal health care cuts. Stay tuned, as HCFANY will review the final budget once it is released.