New York could be on the hook for $2.8 billion under a federal budget plan that eliminates funding for the state to provide health insurance to immigrants awaiting a more permanent resident status.
The budget proposal, part of President Donald Trump’s “one, big beautiful bill” to cut $900 billion in spending, includes a provision that cuts federal dollars to states that offer health coverage to certain immigrant populations under the Affordable Care Act. New York insures more than 500,000 lawfully present immigrants under the Essential Plan, a publicly-funded health plan, using federal dollars available through the ACA.
The proposal, passed Wednesday by the House ways and means committee, seeks to limit eligibility for ACA premium tax credits for undocumented immigrants who reside in the U.S. legally but are not eligible for federal Medicaid dollars, including those who are within five years of receiving their green card or people seeking asylum. Though it would effectively eliminate federal contributions to the Essential Plan for those individuals, New York still has to cover the costs. A 2001 court case, Aliessa vs. Novello, mandates that the state use its own Medicaid money to provide health coverage to lawfully present immigrants.
“It’s cruel,” said Elisabeth Benjamin, senior vice president of health initiatives at the Community Service Society and the attorney who litigated the case. “But beyond being cruel, it just doesn’t make sense for the health care system.”
The proposal adds to a separate plan to fine New York for providing coverage to undocumented immigrants within the House energy and commerce legislation, which also passed on Wednesday. Congressional Republicans included a plan to penalize states that use their own Medicaid dollars to provide health insurance to undocumented immigrants 65 and older – a program that New York launched just last year.
Danielle De Souza, a spokeswoman for the Department of Health, said the agency is monitoring the federal budget and is “deeply concerned” about proposals to limit health care access for people living in New York with legal immigration status.
“If enacted, the provision could jeopardize coverage for hundreds of thousands of residents and strain the state’s safety net,” De Souza said. She did not answer a question about how much money the state stands to lose, but said the Department of Health “remains committed to protecting access to essential health care services and ensuring the well-being of all residents across the state.”
The hospital industry sounded the alarm about the federal government’s move to slash insurance subsidies for immigrants. Ken Raske, president of the Greater New York Hospital Association, said in a Wednesday memo to members that the bill in the ways and means committee included “several troubling health provisions that directly harm New York state,” adding that the loss of health insurance for immigrants will require hospitals to provide more uncompensated care.
“Congress has painted a giant bullseye on New York,” Benjamin said. “I don’t understand how any member of Congress from New York who voted to pass this plan could be serving their constituents.”
