Medicaid Cuts Drop Refugees, Shifting Costs to Hospitals

A coverage cliff for people the government admitted

On October 1, the first major Medicaid cut in the 2025 Republican budget law took effect. It ended full federally funded Medicaid for groups of immigrants who are in the United States legally.611 Section 71109 of the One Big Beautiful Bill Act rewrote the federal definition of which noncitizens qualify. Federal Medicaid money now goes only to citizens and nationals, green-card holders, certain Cuban and Haitian entrants, and migrants living in the U.S. under the Compacts of Free Association.716 Refugees, asylees, humanitarian parolees, and some survivors of trafficking and domestic violence are now outside the program. Many of them had qualified for decades, under administrations of both parties.1213 The Children's Health Insurance Program follows the same rules, so children in these groups lose CHIP as well.12

Green-card holders were not affected.2 Undocumented immigrants were already barred from full federal Medicaid, so the new law does not change their eligibility.7 What has changed is that a much larger group of lawfully present immigrants now gets the same treatment from Medicaid as people with no legal status.16

The reporting is full of hard cases. In Tucson, María Chacon's son became dependent on a ventilator after a car accident. The family came to the U.S. on a T visa for trafficking victims, and Medicaid had been paying for roughly $25,000 a month of his care.10 His medication costs about $7,000 a month, and Chacon expected his supply to run out in mid-October.2 She is applying for a green card, but even with one she would face a five-year wait for Medicaid.10 The New York Times described a woman losing the coverage that pays for her multiple sclerosis treatment.27 Global Refuge, a resettlement group, said Afghan allies, Ukrainian parolees and torture survivors are also losing coverage.13

How many people: the numbers disagree

Coverage of the cut agrees on what it does but not on how big it is. The Congressional Budget Office estimated the immigrant-eligibility change would add about 100,000 people to the uninsured.13 KFF Health News, working from state data, found more than 281,000 people at risk in just nine states and the District of Columbia.513 Arizona officials said 29,000 legal immigrants were removed from Medicaid on October 1, and Florida's estimate is about 177,000.10

The two figures measure different things. KFF counted people at risk of losing coverage in specific states. The CBO projected the net rise in uninsured people nationwide, after accounting for people who find other coverage or whose states keep covering them. Still, Florida's estimate alone is well above the CBO's national figure, which suggests the CBO number is a floor, not a forecast. Minnesota has said most of its affected residents have a state option. Its human services commissioner warned that most states have nothing comparable, which would be "devastating" for those affected and harmful to the wider health system.17

The two sides of the debate also describe the cut very differently. A White House spokesperson said immigrants must support themselves without drawing on benefit programs paid for by taxpayers.5 The National Immigration Law Center called the policy a message that immigrants are unwelcome and should leave.2 Even some restriction advocates think the cut is small. Steven Camarota of the Center for Immigration Studies said the administration is only "nibbling around the edges."10 A City Journal analysis argued that both parties overstated the law's health cuts and that it only "slightly" narrowed eligibility for legal immigrants.24 For the population involved, that reading is hard to defend: refugees and asylees lost their entire federal pathway to comprehensive coverage.

Next: Medicare and the marketplaces

The October cut is the first of several. Under Section 71201, people who are enrolled in Medicare but are not in a permitted immigration category have 18 months from the law's enactment before they lose coverage. That deadline arrives in January 2027.12 Sources give different exact dates, from January 4 to January 27, 2027.1418 The CBO estimates about 100,000 lawfully present immigrants will lose Medicare access.11 Some older immigrants could lose Medicaid in October and Medicare a few months later.18

That matters for Medicare Advantage plans. Medicare Advantage is a private-plan way of receiving Medicare benefits, so it reasonably follows that enrollees whose Medicare eligibility ends will also lose their Advantage plans. Insurers and plan sponsors should expect some members to drop out at the start of the 2027 plan year for eligibility reasons, not because they chose to leave. The coverage so far has not measured how many affected people are in Advantage plans rather than traditional Medicare.

The Affordable Care Act marketplaces are also affected. Starting January 1, 2027, premium tax credits end for refugees, asylees, trafficking survivors and most other lawfully present immigrants who are not green-card holders.23 An earlier change already applied this year: lawfully present immigrants with incomes below the poverty line lost marketplace subsidies starting in January 2026.21 Georgetown researchers estimated that one such enrollee's yearly premium would rise from zero to $5,958.23 The CBO projects about 1 million lawfully present immigrants will lose marketplace subsidy eligibility by 2034.11

Hospitals and emergency rooms

One point appears across nearly all the coverage: people without insurance still get sick and end up in emergency rooms. AP noted that delayed care tends to make conditions worse and more expensive to treat.2 George Washington University's Leighton Ku told the Times that more immigrants are likely to wait until they are "horribly sick." He warned that the added strain on emergency rooms could affect citizens trying to get care too.27

Federal law requires emergency departments to stabilize anyone with an urgent condition, regardless of status. Emergency Medicaid partly pays hospitals back for that care.21 The same law cut that reimbursement as well. For patients who would qualify for expanded Medicaid except for their immigration status, the federal share drops from 90 percent to as low as 50 percent.21 The immigrant-advocacy group NILC put the loss to states and providers at $177 million in federal funds. That cut also started October 1. Hospitals in states with large refugee populations now face more uninsured patients and lower payment rates for the emergency care they still have to provide.25

The 1996 welfare law offers a historical comparison. A study of that law's immigrant restrictions found that a state's uninsurance rate was the only significant predictor of hospitals' uncompensated care. A 1 percent increase in the uninsured population was linked to a 4.1 percent increase in uncompensated care.26 Over the longer term, Georgetown researchers estimate that the marketplace coverage losses, together with the law's other coverage cuts, will produce about $200 billion in uncompensated care over a decade.23 Community health centers, which must serve patients regardless of ability to pay, are expected to take on a larger share.25 UnidosUS, which works with community clinics, has already said its partners lack the capacity to absorb the coming demand.2

Why employers and insured patients should care

The cost of this policy will not fall only on immigrants. The Commonwealth Fund warns that more uninsured patients could push struggling hospitals, especially rural ones, toward closure. It also expects cost-shifting, with commercially insured patients paying more for hospital care.21 Those patients are mostly covered through employers. If hospitals raise commercial prices to make up for unpaid care, employers who sponsor health plans will feel it at renewal time.

Affected immigrants cannot easily move onto job-based coverage. KFF's Drishti Pillai noted that many work in construction, agriculture and food service, where employers often do not offer insurance.6 With employer-sponsored coverage averaging $8,951 for an individual and $25,572 for a family, low-wage employers are unlikely to start offering it now.24

Marketplace premiums face similar pressure. Lawfully present immigrants in ACA plans tend to be younger and healthier than average, so their departure leaves an older, sicker risk pool. That is expected to raise premiums for everyone who stays.2123

There is also a long-term cost. Many of the people losing coverage will eventually get green cards and become eligible again. Advocates warn they will return sicker after years of skipped preventive care and unmanaged chronic conditions, which will cost hospitals and the government more.6

Our view

The administration presents the October cut as protecting taxpayers. KFF expects total federal Medicaid spending to fall by $911 billion as people leave the rolls under the law's various provisions.10 Based on the evidence reported so far, though, this cut mostly moves costs around rather than removing them. The bills will go to emergency rooms, safety-net clinics, state budgets and, eventually, the premiums paid by insured Americans. The next stage arrives in January, when the Medicare and marketplace changes take effect. That will show more clearly how much of the cost lands on everyone else.