As we have already written, the House-passed reconciliation bill section 44111 would penalize expansion states for providing coverage with state-only funds to noncitizens otherwise ineligible for Medicaid, including some lawfully present immigrants, as well as for adopting the state plan option to cover lawfully residing children and pregnant women without a 5-year waiting period in separate CHIP programs and for covering people granted parole for a year or more. (In the immigration context, parole is the discretionary authority granted to the Secretary of Homeland Security to allow an individual to enter, return to, or remain in the US temporarily. Parole decisions are made on a case-by-case basis, typically for humanitarian reasons.) CBO’s preliminary estimate of an earlier version of the policy showed this provision would reduce federal spending by $11 billion over ten years.
Like the House-passed bill, the Senate draft would penalize states for providing coverage with state-only funds to noncitizens otherwise ineligible for Medicaid, see section 71111, but the Senate version does not impose the penalty on states for covering lawfully residing children or pregnant women in separate CHIP or for people granted parole for a year or more in Medicaid. The Senate version of this specific provision is similar to the one scored by CBO (there are other Senate changes that will alter the impact of this policy, discussed below), though whether the differences impact the score remains to be seen.
In both versions, what stands out most is the incredible overreach. The policy would reduce state’s Medicaid expansion match from 90 to 80% because the state’s own policymakers have elected to use the state’s own money to provide other health coverage (not Medicaid!) to certain noncitizens. In other words, not only is the penalty unrelated to the targeted policy, the penalty could not be related to the policy because the federal government does not control this state policy choice. So instead, the federal government found a wholly unrelated way to penalize states for doing something it doesn’t like.
In addition to this already harmful provision that will likely result in states dropping state-only coverage for noncitizens because they cannot afford to pay double for Medicaid expansion coverage, the Senate version includes two new provisions: first, cutting federal funding for emergency Medicaid and second, dramatically limiting Medicaid eligibility for lawfully residing immigrants.
Section 71112 would limit federal matching funds to the state’s regular FMAP for emergency Medicaid services, rather than the expansion match for people who would be eligible for Medicaid expansion but for their immigration status. CBO has not issued a score for this proposal, but it’s unlikely to generate significant savings. Spending on emergency Medicaid accounted for just 0.4% of all Medicaid spending in 2023. What it will do, with no explicable policy rationale, is make it harder for states and hospitals to provide federally-mandated emergency services by limiting the funding available to do so.
If section 71111 stands out for its overreach, section 71112 stands out for its senselessness, and section 71110 stands out for its shocking change in longstanding Medicaid policy. Under section 71110, Medicaid eligibility would be severely limited to only four groups of noncitizens: lawful permanent residents (still subject to a 5-year waiting period), certain Cuban migrants, individuals living in the US under a Compact of Free Association (often known as CoFA migrants, e.g., people from Micronesia, the Marshall Islands and Palau), and lawfully residing children and/or pregnant women without a five-year waiting period in states that have adopted the ICHIA/CHIPRA 214 option. The policy would end eligibility for other lawfully residing noncitizens, including refugees, asylees, parolees, certain abused spouses and children, and certain victims of trafficking.
Yes, you read that right. The bill would end longstanding Medicaid eligibility for refugees. This coverage dates back nearly half a century, first coming about as part of the Refugee Act of 1980. To state the obvious, refugee eligibility for Medicaid is about more than health coverage – it’s about how we as a country treat people arriving in the US after fleeing persecution or violence in their home country. They have applied for refugee status and been approved through a lengthy process including an interview to confirm their critical need and a background check. They have a pathway to become permanent residents and lifelong members of our community. Living up to our commitment to refugees is a critical part of being good faith partners in a world that is big and more interconnected every day. The Refugee Council USA said it well in their letter, signed by over 100 national, state and local organizations with expertise in protecting refugees, asylees and other immigrant groups.
Looking outside of the Medicaid proposals, you can see that limiting lawfully residing noncitizen’s access to benefits is a theme – there are cuts aimed at noncitizens with Medicare and Marketplace coverage, SNAP benefits, Federal Student Aid, citizen children whose families quality for the Child Tax Credit, the list goes on. This might be surprising given the Administration’s executive actions, including this day-1 Executive Order directing OMB to, “identify and stop the provision of any public benefits to any illegal alien not authorized to receive them under the provisions of the INA or other relevant statutory provision.” And it raises some important questions. Why are The White House and Congress saying they are targeting undocumented people getting unauthorized coverage, when they are actually cutting authorized coverage for lawful immigrants? And what is this big, beautiful bill all about? It’s hard to see how taking health care away from refugees is supposed to fit into a bill about tax cuts.