Legal Immigrant Medicaid Cuts Push Health Care Costs Onto States

What took effect on October 1

On October 1, federal Medicaid funding stopped covering a large group of immigrants who are in the United States legally. Refugees and asylees without green cards lost coverage, along with humanitarian parolees, trafficking survivors and certain domestic violence victims. The change comes from Section 71109 of the One Big Beautiful Bill Act, which President Trump signed on July 4, 2025.15 Under the law, federal Medicaid and CHIP money now goes only to citizens, green card holders, certain Cuban and Haitian entrants, and people living in the U.S. under Compacts of Free Association with the Marshall Islands, Micronesia and Palau.414

The cuts did not touch green card holders.1 Children under 19 and immigrants from Cuba, Haiti and some Pacific Island nations are also unaffected.12 States may still use federal money to cover lawfully residing children and pregnant people, and emergency Medicaid is still available.6 Undocumented immigrants were already barred from regular Medicaid before the law passed. That fact gets lost in political messaging. In May 2025, during the congressional debate, the White House put out a misleading claim that the bill would remove unauthorized immigrants from Medicaid.12

The White House defends the policy as a matter of self-sufficiency. Spokesperson Lauren Bis said immigrants should support themselves rather than draw on benefit programs that taxpayers fund.3 Immigrant advocates see a different motive. Ben D'Avanzo of the National Immigration Law Center called the cuts a message to every immigrant that they are unwelcome and should leave.2

How many people lost coverage? The estimates don't agree

The coverage does not agree on how many people are affected, starting with the headlines. One Associated Press headline says "thousands" lost coverage, but the article itself says "hundreds of thousands."12 The gap comes from two very different ways of counting.

The Congressional Budget Office estimated that ending Medicaid eligibility for these adults would leave about 100,000 more immigrants uninsured by 2034.12 State figures collected by KFF Health News are much higher. Nine states and the District of Columbia expected to drop more than 281,000 immigrants in October alone.12 Florida found nearly 177,000 enrollees who no longer qualify.7 Arizona expected nearly 28,000 in KFF's survey7, while AP reported that Arizona officials put the number actually removed on October 1 at 29,000.2 New Jersey expected 15,000 to 25,000, and Washington state about 11,000.7 California expected about 148,000 people to lose Medicaid.7 Illinois put its figure at roughly 9,30017, Pennsylvania about 8,00015 and Minnesota about 5,550.11

North Carolina shows why the first counts can mislead. KFF and the Asheville Citizen-Times both cited about 29,000 people affected there.19 State officials told NC Newsline that this was the number of people they first warned. About half later turned out to be eligible anyway, because they were children, pregnant or recently postpartum women, or green card holders. That leaves about 14,000 actually losing coverage.13 States won't release final termination numbers until later this fall.7

The two sets of numbers are less contradictory than they look. The CBO figure is a net increase in the uninsured ten years out. It assumes some people find other coverage or get green cards. The state figures count people losing a specific benefit right now. The early state data suggests the short-term impact may be larger than the CBO expected7, and the near-term loss is the one that matters to someone whose prescription runs out this month.

Who pays: costs shift rather than disappear

From a health care costs perspective, the main point is that most of this spending moves somewhere else rather than going away. Hospitals must provide emergency care regardless of immigration status and can bill emergency Medicaid for it. George Washington University's Leighton Ku warned that more immigrants will wait until they are severely ill to seek care, putting pressure on emergency rooms in ways that could affect citizens too.8 The Minnesota Hospital Association put it more directly. It said people who lose coverage delay care until they need more intensive and expensive treatment. It added that the unpaid bills are passed on to other patients at a time when uncompensated care is already at historic highs.11

Carmen Feliciano of UnidosUS said states will end up paying more because preventable conditions turn into emergency room cases. She also said community partners are already overwhelmed and cannot absorb the coming wave of uninsured patients.2

The savings for the federal government look modest. Steven Camarota of the Center for Immigration Studies, which favors less immigration, supports the administration's goals. Even so, he said this provision probably won't save much money and called it an effort to "nibble around the edges."82 The conservative Paragon Health Institute cites CBO projections of more than $200 billion in federal savings over ten years from the law's immigrant eligibility provisions. That total, though, also covers Medicare, ACA subsidies and verification rules, not just this Medicaid change.14 Both points can be true. The law as a whole saves a lot of money, while this particular cut affects a small, often sick population and saves little. Read together, the reporting suggests the October 1 change is mostly about policy direction, with budget savings a secondary effect.

The change also lands on top of much bigger cuts. KFF projects that federal Medicaid spending will fall by $911 billion as enrollment shrinks.2 The CBO expects the law's Medicaid changes to leave 7.5 million fewer people insured by 2034.5 Work requirements, due by the end of 2026, account for about 5 million of those.720

Some states pay to keep people covered

Whether someone keeps coverage now depends heavily on where they live. California is spending $365 million on a separate program to keep its affected immigrants covered through July 2027.7 New York and Pennsylvania have state-funded coverage for many of the people affected.7 Minnesota says most of its 5,550 can move to MinnesotaCare, the state's own low-income program, though they will now pay premiums and copays. About 200 to 250 people who rely on Medicaid-funded home and community services have nowhere to go.11 Minnesota's temporary human services commissioner noted that most states offer no alternative for this group.11

That gap is the cost story at the state level. States with the budget and political will to backfill are now covering what Washington used to share. Florida, the largest affected state in the KFF survey, gets no such relief, according to the reporting. Elsewhere, people are left with stopgaps. Illinois points them to emergency Medicaid and Refugee Medical Assistance, but emergency Medicaid doesn't cover routine visits or prescriptions, and the refugee program lasts only eight months.17

The green card backlog

The most avoidable part of this problem is a federal processing delay. Getting a green card restores eligibility, and refugees can apply after one year in the country.16 But U.S. Citizenship and Immigration Services has about 149,470 pending green card applications from refugees. From October through June it completed only about 3,800. Processing now takes about 18 months, up from eight at the end of 2024.8 A New Jersey resettlement director said clients who would have had green cards under the old timelines are now losing Medicaid while they wait.7

The human costs reported are severe. An Arizona mother told AP that her son's medication costs about $7,000 a month and his supply runs out in mid-October.2 She has a pending green card application, but even after approval she would face a five-year wait for Medicaid.5 The New York Times reported on a paraplegic Ohio woman with multiple sclerosis who depends on daily home nursing. It also described a dialysis patient who was told she would lose her place on the kidney transplant list without insurance.8 Notice was also uneven. Advocates said some states didn't send letters until September, leaving little time to appeal mistakes.7

What comes next

The October cut is the first step in a series. In January, the CBO projects that changes will eventually remove ACA marketplace subsidies for about 1 million lawfully present immigrants and Medicare eligibility for about 100,000 by 2034.7 The Center for Medicare Advocacy says Social Security will send termination notices in late December, with Medicare coverage ending February 1, 2027, under an appeals process the group considers inadequate.4 The administration has also revived a rule that could deny green cards to immigrants who use benefits such as Medicaid.3

Overall, the coverage points to a policy that saves Washington relatively little and moves costs onto emergency rooms, other insured patients and the states willing to step in. It also hits hardest a group the federal government itself admitted on humanitarian grounds. Even Camarota, who supports the administration's goals, doubts the budget case for this provision. That leaves deterrence as the most likely reason for the change.