Eroding the American Dream: The Roll-back of Health Coverage and Care for Lawfully Residing Immigrants
Federal government actions targeting undocumented immigrants are no secret. But Congress and the administration are also making it harder for lawfully residing immigrants to secure health coverage.
Authors: Patti Boozang, Elizabeth Dervan, and Tara Straw
Editor: Jocelyn Guyer
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tl;dr
The federal government is imposing new, stringent restrictions on access to health coverage and care for lawfully residing, noncitizen immigrants, reversing decades of bipartisan policy. H.R.1 alone is projected to result in 1.3 million more immigrants becoming uninsured.
The impact on lower income immigrants who are legally residing in the country will be swift and severe and include elimination of any affordable health coverage. Access to care will be compromised, with corresponding delays in primary and preventive care, as well as treatment for chronic conditions.
The impact doesn’t stop there. The long-standing policy rationale for expanding healthcare coverage to immigrants is rooted in safeguarding community health, reducing uncompensated car, and ensuring that immigrants can engage in work, education, and community – prerequisites to a thriving U.S. economy and a pathway to achieving the American dream.
With so many legally residing immigrants slated to lose coverage, it becomes even more important for States to see if they can mitigate the damage. They still have flexibility to cover some limited groups of lawfully residing immigrants in Medicaid -- pregnant women and children, for example -- and they can use their own funds to expand coverage to other immigrant populations, but the fiscal challenges will be substantial.
The 80 Million Impact
H.R.1 includes major policy and funding changes that scale back access to health coverage for many lawfully residing noncitizens beginning next year. These changes are estimated to leave 1.3 million more immigrants uninsured, undermining their access to healthcare. At the same time, the Trump administration has announced similar restrictions on noncitizen immigrants’ access to other federally-funded health and human service programs. These policy actions are aimed at noncitizen immigrants who “play by the rules” – they are in the country under a legal status – impeding their ability to work and putting their financial security and shot at the “American dream” at risk.
Immigrants in the United States have always faced barriers to health coverage, and as a result, they are less likely to be insured compared to U.S. citizens. Despite high rates of employment, noncitizen immigrants are more likely to work in low-wage jobs that don’t offer employer-sponsored health insurance. Medicaid has also long been a crucial coverage program for immigrant families, with many lawfully residing noncitizens eligible for Medicaid and the Children’s Health Insurance Program (CHIP) for decades. The Affordable Care Act (ACA) significantly improved access to affordable healthcare for immigrants by extending Marketplace subsidies to lawfully present noncitizens, helping to further lower the uninsurance rate and improving access to care.
The policy rationale for making sure that our coworkers, neighbors, and kids’ friends, including noncitizen immigrants who reside in our country legally, have access to health coverage and healthcare impacts all of us, just as reversing the policy will. Affordable health coverage enables people to seek timely preventive and chronic disease care, which safeguards community health. Timely preventive care and chronic disease treatment is more cost-effective than waiting to get sicker and seeking higher cost emergency and acute care. And if you don’t have insurance, you’re likely very hard-pressed to pay for those services, which shows up in our healthcare system as a cost-shift to people with insurance (and our employers) in the form of higher premiums. All of this is more than a theory: studies show that immigrants who reside in states with more expansive immigrant coverage policies are more likely to be insured, their kids are more likely to receive medical and dental care, and they have better pregnancy outcomes for themselves and their babies. There’s an American dream-related rationale too: studies show that immigrant children and families see reductions in poverty as a result of health coverage expansions. This makes sense if you consider health as a precondition of steady employment and engaging in work, education, and community.
Medicaid/CHIP and Marketplace Coverage for Noncitizen Immigrants
Today, states are able (and sometimes required) to provide Medicaid/CHIP coverage to “qualified” noncitizens (QNCs) specified under the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 and certain other lawfully residing noncitizens who meet the other eligibility criteria of the state. People who reside in this country under the QNC designation include, for example, lawful permanent residents (LPRs), refugees, asylees, certain humanitarian parolees (such as certain Afghans who aided U.S. operations in Afghanistan or people fleeing violence in the Ukrainian war), victims of human trafficking, individuals residing under the Compacts of Free Association (often referred to as COFA migrants), and Cuban-Haitian entrants, among others. Some of these folks, such as LPRs, are subject to a five-year waiting period (meaning they have held a “qualified” immigration status for five years) before qualifying for Medicaid/CHIP.
States can also provide Medicaid/CHIP coverage to lawfully residing children or pregnant women through the so-called “CHIPRA 214” state option, authorized under the Children’s Health Insurance Program Reauthorization Act (CHIPRA) of 2009. Under this option, states can opt to provide coverage to QNCs who are still in the five-year waiting period, and to some other categories of lawfully residing noncitizen immigrants if they are children or pregnant women. A lot of states (red, blue and purple) use the CHIPRA 214 option today. Some states also provide health coverage to noncitizens through CHIP Health Services Initiatives (HSIs), the From Conception to End of Pregnancy (FCEP) option (allowing states to provide CHIP coverage to children from conception to birth, regardless of the pregnant woman’s immigration status), and state-funded programs. And this long-standing policy to provide healthcare to low-income noncitizen immigrants who lack other sources of health coverage has been supported by both political parties over many years.
The Marketplaces are also important sources of affordable coverage for lawfully residing individuals. Marketplace subsidies that help individuals enroll in and use health coverage – premium tax credits (PTCs) and cost-sharing reductions – are available to a broader group of lawfully present immigrants (not just QNCs) compared to Medicaid/CHIP. In this way, the Marketplaces help fill the gaps for noncitizens who are ineligible for Medicaid/CHIP, including during the five-year waiting period where applicable. Marketplace subsidies are also available to lawfully present noncitizens with incomes under 100% of the federal poverty level (FPL) as a statutory exception from what is otherwise the lower-bound income level for PTC eligibility.
The rationale for and public health benefit of covering noncitizen immigrants is so compelling that some states have expanded their coverage efforts beyond these federally-supported coverage programs, to state-only funded health coverage for undocumented noncitizen immigrants. For today’s blog, however, we focused on what’s happening to health coverage for legally residing noncitizens in our country.
New H.R.1 Restrictions on Health Coverage for Noncitizen Immigrants
H.R.1 eliminates the availability of federally-funded Medicaid and CHIP coverage and PTCs and for many noncitizens who have been eligible for these programs for years and eliminates PTCs for many categories of noncitizens at the lowest income, lawfully present noncitizens who are subject to a waiting period before they qualify for Medicaid. This policy change ends any affordable coverage option for many lawfully residing noncitizens in our country. Some states may opt to provide state funded coverage to some of their noncitizen residents who will lose coverage as a result of H.R.1 policies but will face major challenges in doing so as they absorb historic funding cuts enacted under the budget reconciliation law.
Medicaid/CHIP. Beginning October 1, 2026, only the following lawfully present noncitizens will remain eligible for federally-funded Medicaid/CHIP coverage:
LPRs (after the five-year waiting period)
Cuban/Haitian entrants
COFA migrants
Lawfully residing children and pregnant individuals under CHIPRA 214 (at state option)
FCEP (at state option)
People who will lose access to Medicaid/CHIP as of October 2026 include: certain Afghans and Iraqis with a Special Immigrant Visa or parolees; certain Ukrainian refugees and parolees; refugees; asylees; individuals granted withholding of deportation or removal; veterans honorably discharged or active duty servicemembers, or the spouse and dependent child of that person, and victims of trafficking.
Marketplaces. Beginning January 1, 2026, PTCs will no longer be available to noncitizens with income under 100% of the FPL who are ineligible for Medicaid due to immigration status, including LPRs subject to Medicaid’s five-year waiting period. This creates a coverage gap under the poverty level for some of the lowest income lawfully present noncitizens. Following that, beginning January 1, 2027, PTCs will only be available to:
LPRs
Cuban-Haitian entrants
COFA migrants
This means that coverage will be eliminated for all people mentioned above who lose access to Medicaid. But in addition, a large number of people in other immigrant categories will lose access to PTC, including people who are Lawful Temporary Residents, Temporary Protected Status (TPS), Deferred Enforced Departure (DED), and Special Immigrant Juveniles.
Together, these changes to Medicaid/CHIP and Marketplace subsidy eligibility end the availability of any affordable coverage option for many lawfully residing noncitizens in the country.
The Bottom Line
H.R.1’s elimination of long-standing, federally-funded affordable coverage for some lawfully residing noncitizen immigrants will result in over a million more uninsured people, a number which we suspect is understated as it does not take into the account the “chilling effect” on legal immigrants who will remain eligible for Medicaid, CHIP, and Marketplace coverage, but decline to seek such coverage due to the fear generated by new federal immigration and immigrant-related policies. The result will be compounded by the health risks and fiscal pressures that healthcare providers, insurers, employers, communities, and others will face under H.R. 1. Remaining coverage avenues for noncitizen immigrant children and pregnant women will become even more essential than they are today. And states will face challenging decisions and budget demands as they consider if and how they can fill a new coverage gap that will impact their residents.
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