This time next year, an estimated 1.4 million lawfully present immigrants are expected to lose health coverage due to the Budget Reconciliation Law. The law restricts eligibility for federally funded health coverage to only a very narrow group of immigrants – lawful permanent residents (LPR, or green card holders), Cuban and Haitian entrants, and people residing in the US under COFA (citizens of the Marshall Islands, Micronesia and Palau). Though the new rules span across programs, the implications for other lawfully present immigrants are a little different for Medicaid, Marketplace and Medicare compared to current law. (Note that under longstanding federal policy, undocumented immigrants are already ineligible for Medicaid, Marketplace and Medicare health coverage.)
Medicaid
Beginning October 1, 2026, federal Medicaid/CHIP funding for lawfully present noncitizens is limited to LPRs, Cuban/Haitian entrants, and COFA migrants under section 71109 of the Budget Reconciliation Law. At state option, federal funding is also available for coverage of lawfully residing children and/or pregnant people under ICHIA (Immigrant Children’s Health Improvement Act, also known as CHIPRA 214 state option) and for prenatal care under FCEP (From Conception to the End of Pregnancy). In states that have already selected these options, plus any states that newly adopt them, ICHIA child and pregnancy coverage should continue even after October 1, 2026, though states may need to update their applications and eligibility and enrollment systems to ensure a smooth transition. As of April 2025, 38 states have adopted the ICHIA option for children in Medicaid, and 21 of 30 states have done so for children in separate CHIP. Thirty-two states have adopted ICHIA for pregnancy coverage in Medicaid, plus six of seven in separate CHIP. Twenty-five states have adopted FCEP.
In all states, lawfully residing adults who are not pregnant will lose coverage unless the state chooses to cover them with state-only funds. In states without ICHIA or FCEP, lawfully residing children and pregnant women will lose coverage alongside them, unless the state chooses to take the ICHIA/FCEP option or cover them with state-only funds. The summary table below shows examples of the people who are likely to become uninsured as a result of this change by immigration status. While about 15 states have state-funded coverage for all children regardless of immigration status, fewer states (about eight) offer such programs for adults today. Moreover, some state-funded coverage programs are often capped to cover only a certain number of people and some are limited to certain age groups (e.g., young children or older adults). The National Immigration Law Center has some helpful maps that show the current landscape of state-funded coverage.
CBO estimates that this policy change will increase the number of uninsured people by about 100,000, though that number could go up or down depending on how states respond (see Estimate of Annual Changes in the Number of People Without Health Insurance under Data and Supplemental Information).
Marketplace
The changes to eligibility for premium tax credits and cost-sharing reductions in the Marketplace are similar to those outlined above for Medicaid in that, as of January 1, 2027, only LPRs, Cuban/Haitian entrants, and COFA migrants will be eligible for subsidized Marketplace coverage under section 71301 of the Budget Reconciliation Law. However, subsidized Marketplace coverage has historically been available to more lawfully residing immigrant groups compared to Medicaid, therefore people with a wider range of lawful immigration status are likely to become uninsured because of this change. See the summary table below for examples. CBO estimates this provision will increase the number of uninsured people by 900,000.
Additionally, section 71302 of the Budget Reconciliation Law removes a special rule that allowed lawfully present immigrants, including many LPRs, with incomes under 100% of poverty to gain access to subsidized Marketplace coverage if they are ineligible for Medicaid due to their immigration status (e.g.., if they are in the 5-year waiting period for Medicaid benefits). This provision goes into effect January 1, 2026, and CBO estimates it will increase the number of uninsured people by 300,000.
If states offer state-funded coverage to immigrant groups ineligible for federally funded coverage, some current Marketplace enrollees could find other sources of coverage. However, most state-funded programs to date limit eligibility to adults with family income below 138% of poverty, with higher income eligibility levels during childhood and pregnancy. There are exceptions – for example, in Colorado, state residents earning up to 300% of poverty may be eligible for state-based financial assistance to purchase individual coverage, regardless of immigration status. The National Immigration Law Center has a detailed, state-by-state table of the current health coverage programs available.
Medicare
Like the Medicaid and Marketplace eligibility restrictions described above, section 71201 restricts Medicare eligibility for noncitizens to LPRs, Cuban/Haitian entrants, and COFA migrants. But unlike the provisions described earlier, the Medicare change took effect immediately upon enactment for new Medicare enrollees, and current enrollees will lose their coverage by January 4, 2027. It is important to remember that these enrollees qualified for Medicare based on having already paid into the system (e.g., working 40 qualifying quarters) and meeting age or disability requirements. CBO estimates this change will increase the number of uninsured seniors/people with disabilities by 100,000. A few states have adopted state-funded programs that may help seniors/people with disabilities losing Medicare coverage, but otherwise they are unlikely to find affordable coverage elsewhere.
Budget Reconciliation Law Immigrant Eligibility Summary Table
Examples of Lawfully Present Immigrants Losing Federally Supported Health Coverage | Medicaid (Sec. 71109, effective 10/1/26) | Marketplace (Sec. 71301, effective 1/1/27) | Medicare (Sec. 71201, effective 7/4/25*) |
Refugees | X | X | X |
Asylees | X | X | X |
People granted parole for at least 1 year | X | X | X |
Survivors of domestic violence and trafficking | X | X | X |
Members of a federally recognized Indian tribe or American Indian born in Canada | X | X | X |
People with Temporary Protected Status | N/A | X | X |
People granted deferred action or deferred enforcement departure | N/A | X | X |
People with work visas or other temporary visas | N/A | X | X |
Certain applicants, including applicants for:
| N/A | X | X |
Special immigrant juveniles | N/A | X | X |
People who were granted humanitarian parole | N/A | X | X |
Other lawfully present immigrants | N/A | X | X |
* The changes to Medicare eligibility are effective upon enactment for new enrollees and 18 months after enactment, or 1/4/27, for current enrollees.
N/A indicates these statuses are not currently eligible for Medicaid so they are not impacted by the policy change in H.R.1.