State Policy
States Cut Immigrant Health Coverage Amid Budget Pressure from Federal Medicaid Reductions
Several states that use state-only funds to cover healthcare for undocumented immigrants are reducing or eliminating those programs due to budget constraints. The cuts follow federal Medicaid funding reductions and the expiration of enhanced Affordable Care Act subsidies. States affected include those that previously expanded coverage beyond federal eligibility requirements using state general funds. The reductions take effect as states finalize their fiscal year 2027 budgets, with some changes beginning as early as July 2026.
Why it mattersMCOs operating in states with immigrant coverage programs may see membership declines and increased uncompensated care costs as enrollees lose state-funded coverage and shift to emergency Medicaid or become uninsured.