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6/4/25: See updates/corrections below regarding marketplace eligibility for immigrants subject to the 5-year bar for Medicaid eligibility, along with CBO estimates of coverage losses among immigrants in the ACA marketplace.
There is so much to lament in the healthcare provisions included in the legislative monstrosity that passed the House with no Democratic votes on May 22. By CBO’s conservative estimate, provisions affecting Medicaid and the ACA marketplace will reduce spending by about $900 billion over ten years and increase the uninsured population by about 11 million — 15 million if you count Republicans’ refusal to extend the enhanced ACA premium subsidies created by the American Rescue Plan and funded only through 2025.
Reliable scholars have detailed the likely effects of Draconian work reporting requirements and more frequent redeterminations in Medicaid, and of the miles of red tape wrapped around prospective ACA marketplace enrollees, which impose unsustainable cost and risk on many enrollees (Jonathan Cohn has just published a painfully good overview of the bill’s assault on the marketplace).
Here I want to focus on the legislative aggression unleashed on immigrants — lawfully present as well as undocumented.
States penalized for covering the undocumented and some lawfully present immigrants
The headliner is that states that provide Medicaid or Medicaid-like health coverage to certain undocumented populations with state funds only — since federal funds can’t be used to cover the undocumented — will suffer a reduction of the federal share of the cost of coverage (the Federal Medical Assistance Percentage, or FMAP) for the low-income adults rendered eligible for Medicaid by the ACA expansion, from the current 90% to 80%. The biggest hit would land on California, which in several stages has extended coverage to undocumented residents of all ages and currently covers 1.65 million of them, or 85% of the national total. California estimates the loss in federal funds specifically from the FMAP penalty at $4 billion annually. States with more targeted programs, like New Jersey’s Cover All Kids, which covers about 24,000 undocumented children, would also suffer the FMAP penalty.
The FMAP penalty also applies to states that cover certain categories of lawfully present noncitizens. Originally, the draft provision applied the penalty to states that exercise a legal option created in 2007 to waive the federal 5-year waiting period for Medicaid eligibility for immigrant children and pregnant women, and also to extend eligibility to lawfully present children and pregnant women who are not “qualified non-citizens.” At present, 38 states (including D.C.) waive the 5-year bar for children, and 32 for waive it for pregnant women. Penalizing such coverage proved too cruel even for Republicans, and a late amendment exempted coverage of lawfully present children and pregnant women from the FMAP penalty.
About a quarter of all Medicaid/CHIP enrollees are in the eligibility category created by the ACA expansion (adults with income up to 138% of the Federal Poverty Level). States that maintain their programs for the undocumented — or for lawfully present immigrants now barred from state-funded coverage — will have to pay double to cover that population (20% rather than 10%). That’s a prohibitive hit to state budgets.
CBO estimates that the bar on state coverage of the undocumented and some lawfully present noncitizens will increase the uninsured population by 1.4 million* — worsening health among people upon whose often hard and low-paid labor the nation depends, increasing demand for acute care, depriving hospitals of revenue. Cruel and counterproductive as this provision is, it’s what you might expect from a party that ran on mass deportation of the undocumented.
Kicking legal immigrants out of the ACA marketplace
More surprising, if not more cruel, is the assault on lawfully present noncitizens. If the bill becomes law more or less as is, almost all non-green card holders of any status, with a couple of exceptions, will be denied access to subsidized coverage in the ACA marketplace.
In a previous bout of xenophobia, the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) imposed a five-year waiting period before an immigrant who obtained legal status could become eligible for Medicaid (a few states impose longer waiting periods). The ACA did not repeal this “5-year bar,” but it did provide eligibility for marketplace subsidies to those subject to it, even if their income was below the income threshold for citizens’ subsidy eligibility (138% of the Federal Poverty Level in states that enacted the ACA Medicaid expansion; 100% FPL in nonexpansion states). Lawfully present noncitizens with income above the Medicaid eligibility threshold are also eligible for marketplace subsidies
A provision added to the bill by the Ways and Means Committee ends access to ACA premium subsidies for lawfully present noncitizens except for Lawful Permanent Residents (green card holders), certain Cuban immigrants, and individuals living in the United States through a Compact of Free Association (citizens of Micronesia, the Marshall Islands, and Palau). Two provisions immediately following cut off access to coverage for different categories of lawfully present immigrants. Here is a Ways & Means summary published on May 20, two days prior to passage. As indicated below, one section was later struck.
Stripping coverage from the poorest immigrants
Currently, lawfully present noncitizens subject to the "5-year bar" to federally financed Medicaid eligibility are eligible for subsidized marketplace coverage even if their income is below 100% FPL (in all states), or below 138% FPL, the Medicaid eligibility threshold in the 40 states plus D.C. that have enacted the ACA Medicaid expansion.
The xenophobes authoring this bill seek to strike that "loophole" (an interesting term for an ACA provision that explicitly provided coverage to the targeted population) by barring subsidy eligibility for anyone with income below 100% FPL.** In 2025, 548,650 ACA marketplace enrollees reported income under 100% FPL. CBO estimates that stripping eligibility from those subject to the 5-year bar will increase the uninsured population by 300,000.
The will would also strip subsidy eligibility from lawfully present noncitizens in every higher income bracket. That will increased the uninsured population by 1 million, according to CBO.
The bars to immigrant coverage put New York in a particularly cruel bind. From 2001 to 2015, in obedience to a state court decision in Aliessa v. Novello (June 5, 2001), New York provided Medicaid coverage with no federal funding to lawfully present noncitizens subject to the federal 5-year bar. In 2015, the state exercised an option provided by the ACA to stand up a Basic Health Program — Medicaid-like low-cost coverage — for state residents with income up to 200% FPL — an alternative to the ACA marketplace for low-income enrollees, with fixed benefits and lower out-of-pockets costs than usually offered by marketplace plans. By statute, the federal government pays 95% of BHP costs (as compared to 100% of marketplace costs). In April 2015, New York transferred 225,000 lawfully present noncitizens from state-funded Medicaid to the BHP, dubbed the Essential Plan - -shifting 95% of the cost of coverage to the federal government.
As of now, the state reports, 506,000 Essential Plan enrollees would be rendered ineligible by the House bill. Those enrollees remain ineligible for federally funded Medicaid — and, if coverage for them in the Essential Plan is barred, the state is still required by by the Aliessa decision to fully fund Medicaid coverage for them. Immigrant enrollees at higher incomes would also lose subsidized coverage, both in the Essential Plan (now offering zero-premium coverage to New Yorkers with incomes up to 250% FPL) and in the state marketplace. The New York Dept. of Health said in an emailed statement:
The provisions of the House Budget bill would make over 700,000 lawfully present immigrants ineligible for premium tax credits and the Essential Plan, resulting in a loss of over $7.5B in federal funding annually for New York State. Under the NYS constitution, the state is required to provide some of this population with equivalent coverage—which in this case, would mean transitioning approximately 500,000 people to state-funded Medicaid, at an annual cost of $2.7B to New York State.
I believe that the bill provision creating the FMAP penalty, Section 44111, could also bar New York from covering some current lawfully present noncitizen EP enrollees with income under 138% FPL in state-funded Medicaid. (I could be wrong about this — I’m checking and will update.) The provision imposes the FMAP penalty on states that provide Medicaid to immigrants who are not “qualified aliens” as defined in Sec. 431 of PRWORA:
Lawfully present noncitizens who are not “qualified aliens” are classified as Permanently Residing Under Color of Law (PRUCOL) — and, as mandated by Aliessa, were covered by New York’s state-funded Medicaid program prior to the Essential Plan’s launch in 2015. Those with incomes that would otherwise qualify for Medicaid are currently eligible for the Essential Plan. There are 13 PRUCOL categories, including
a. persons paroled into the U.S. showing status of less than one year.
b. persons residing the U.S. pursuant to an Order of Supervision
c. persons granted an indefinite stay of deportation
d. persons granted an indefinite voluntary departure
e. persons on whose behalf an immediate relative petition has been approved, and family members covered by the petition
Full list here.
The New York Dept. of Health statement above, by asserting that the state anticipates moving 500,000 EP enrollees to state-funded Medicaid, suggests that New York is anticipating moving virtually all current Essential Plan enrollees with income under 138% FPL into state-funded Medicaid, as this month’s enrollment report shows 505,603 enrollees with income below 138% FPL (see totals for Essential Plans 3 and 4).
UPDATE, 6/4/25: A separate paragraph in Sec. 112102 specifically takes eligibility for Basic Health Programs away from immigrants with income under 138% FPL subject to the 5-year bar. Now, on the one hand, as of 2024, New York’s Essential Plan is not a BHP (it’s a marketplace alternative granted by ACA innovation waiver)— and, per above, 5-year-barred immigrants with income in the 100-138% FPL range are marketplace-eligible, and so presumably Essential Plan-eligible. On the other hand, the waiver that removed BHP status from the Essential Plan (so eligibility could be extended to 250% FPL, beyond the 200% FPL cap allowed for BHPs) also specified that if the enhanced ACA subsidies created by ARPA were allowed to expire, the Essential Plan would revert to BHP status. In any case, the state is anticipating moving all enrollees with income below 138% FPL into state-funded “Medicaid".”
Stepping back, Georgetown’s Edwin Park overviews (in a post published just as I was finalizing this one) state programs covering lawfully present groups that would be subject to the FMAP penalty:
…in addition to the 14 states using their own funds to provide coverage to undocumented children, this financial penalty would apply to another 10 states using the option to cover lawfully residing children and pregnant women in separate state CHIP programs. The penalty would also apply to the many states now providing federally funded Medicaid coverage to certain lawfully residing immigrants after five years (including so-called “parolees” who have been lawfully admitted for humanitarian reasons including most recently people from Ukraine and Afghanistan). It would also apply to some states providing coverage using their own funds to lawfully residing immigrants for the first five years they are in the U.S.
Barring some lawfully present noncitizens from Medicare
Section 112103 (originally 112104) strips Medicare eligibility from immigrants lacking a green card (lawful permanent residents) who would otherwise qualify, e.g., those with the required 10 years of taxpaying work experience in the U.S. (Exceptions, as in the bill’s bar on subsidized marketplace coverage, are for Cubans who entered under a family reunification program and people residing under the Compacts of Free Association (citizens of Micronesia, the Marshall Islands, and Palau). According to a summary of the bill’s effects on immigrants from the National Immigration Law Center, those who could lose Medicare coverage under this provision include the following:
Persons granted Temporary Protected Status or Deferred Enforced Departure
Refugees, asylees, persons granted withholding of removal
Trafficking survivors
Survivors of domestic violence who have filed a self-petition under the Violence Against Women Act (or who have an approved I-130 visa petition filed by a spouse/parent)
Cuban/Haitian entrants under the Refugee Education Assistance Act of 1980 (with the exception of a subset of Cuban nationals)
Persons granted humanitarian parole into the U.S.
Non-immigrants, including survivors of serious crimes, and persons on work visas
Persons granted deferred action
Spouses and children of U.S. citizens with an approved visa petition and pending application to adjust to lawful permanent residence
Applicants for asylum, withholding of removal or relief under the Convention Against Torture who have been granted work authorization or if under 14 years old have had an application pending for at least 180 days.
Bonus cruelty: Those who qualify for Medicare under current law but won't qualify after passage will be cut off after a year.
The Republican bill is so staggeringly harmful to the national welfare (and, thanks to the rollback of alternative energy funding, to global welfare) that focusing on any one type of harm it inflicts is enough to send a dispassionate observer into shock. The bar on states offering health coverage to the undocumented — including children — is cruel and counterproductive. The bar on offering subsidized coverage to many categories of lawfully present enrollees extends the scope of the bill’s wanton, bigoted, aggression against immigrants.
Postscript: I want to bring into consciousness a bit of by-the-way demagoguery in the bill that’s nagged me repeatedly as I returned to the bill text. It’s here
The subtitle gives the lie to the title, as Sections 112101-112103 all strip coverage from lawfully present immigrants. Sec. 112101 denies the ACA marketplace to PRUCOL immigrants; 112102 takes away access for the lowest-income immigrants of all statuses who are subject to the five-year bar; and 112103 takes Medicare away from some immigrants who have lived and worked here legally for more than ten years. These gratuitously cruel and stupid measures also give the lie to Republicans’ semantic trickery in claiming they are not denying access to anyone as they concentrate mainly on establishing bureaucratic and financial barriers to getting and staying covered.
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* A footnote to the CBO analysis of the E&C portion of the bill (Title IV) explains: “Included in that 8.6 million total [increase in the uninsured population] are an estimated 1.4 million people without verified citizenship, nationality, or satisfactory immigration status who, if section 41110 were enacted, would no longer be covered in state-only funded programs in 2034.”
** Correction, 6/6/: I originally asserted that the House bill would also strip subsidy eligibility from lawfully present noncitizens with income in the 100-138% FPL range in states that have enacted the ACA expansion (where Medicaid eligibility for those not subject to the 5-year bar extends to 138% FPL. That was incorrect; the ban on subsidy eligibility extends only to 100% FPL. But the bill does take away subsidy eligibility in BHPs for enrollees with income below 138% FPL, creating the potential problem for New York described above. Further, I have updated the post with CBO item-by-item estimates increases in the uninsured population, provided in a June 4 letter to ranking members of the Senate Finance and House Energy & Commerce and Ways & Means committees.
Photo is a FEMA image in the public domain.
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