Ernie is not dying of AIDS; Ernie is not dying of leukemia. Ernie is a puppet

Wiki:

While many rumors have been started about the American children's television series Sesame Street, a few have been widely propagated and perpetuated over the years.

In 1990, puppeteer Jim Henson's death spurred rumors that Ernie would be "killed off" in the show, much the way the character of Mr. Hooper was after actor Will Lee's passing some years earlier. Rumor said that he would be either killed by a vehicle, AIDS, or cancer. There was no legitimacy to this rumor, but because producers took their time recasting a puppeteer for Ernie, the delay allowed the claims to burgeon. A spokesman for the series was quoted as saying "Ernie is not dying of AIDS; Ernie is not dying of leukemia. Ernie is a puppet".

In 2002, Sesame Workshop announced that a character with HIV would be introduced to Takalani Sesame, the South African version of the show. Many groups wrongly presumed that the American version would be getting a "gay Muppet". This concern came about presumably because of a perceived connection between homosexuality and HIV in the United States, but the character with HIV is only present on this international version of the show. The character, Kami, contracted HIV from a blood transfusion as an infant.

In 2005, rumor began to spread that Cookie Monster would be replaced with Veggie Monster. As a result of a more health-focused message, the producers of Sesame Street began to incorporate fruit and vegetables into Cookie Monster's diet besides just cookies. Sesame Street assured its viewers that although Cookie Monster consumes cookies, he also eats fruit and vegetables but will always retain the long-loved name of Cookie Monster.