Federal Budget Bill Aims to Penalize States That Insure Illegal Immigrants

On May 23, Phil Galewitz and Christine Mai-Duc reported for KFF Health News that President Donald Trump’s signature budget legislation would penalize 14 states that offer health coverage to unauthorized immigrants. “The states, most of them Democratic led, provide insurance to some low-income immigrants, often children, regardless of their legal status. Advocates argue the policy is both humane and ultimately cost-saving.”

Galewitz and Mai-Duc wrote that the federal legislation would slash federal Medicaid reimbursements to those states by billions of dollars annually unless they roll back the benefits.

The bill narrowly passed the House on Thursday. It makes substantial spending cuts to Medicaid that congressional budget scorekeepers say will leave millions of low-income people without health insurance, KFF Health News noted.

“The cuts, if approved by the Senate, would pose a tricky political and economic hurdle for the states and Washington, D.C., which use their own funds to provide health insurance to some people in the U.S. without authorization.

Those states would see their federal reimbursement for people covered under the Affordable Care Act’s Medicaid expansion cut by 10 percentage points. The cuts would cost California, the state with the most to lose, as much as $3 billion a year, according to an analysis by KFF.”

Two states, Galewitz and Mai-Duc reported, Utah and Illinois, have “trigger” laws that terminate their Medicaid expansions if the feds reduce their funding match. That means unless those states either repeal their trigger laws or stop covering people without legal immigration status, many more low-income Americans could be left uninsured.

“The penalty for covering people in the country without authorization is one of several ways the House bill cuts federal Medicaid spending.

The legislation would shift more Medicaid costs to states by requiring them to verify whether adults covered by the program are working. States would also have to recertify Medicaid expansion enrollees’ eligibility every six months, rather than once a year or less, as most states currently do.”