Medicaid is a federal state partnership with different pots of money for different classes of beneficiaries, each with different matching funds. For every dollar states spend on Medicaid beneficiaries, the federal government reimburses a certain percentage that varies from state to state and varies by category of beneficiaries. For instance, states choosing to expand Medicaid under the Affordable Care Act can expect the federal government to pay 90% of the costs. The one group states cannot charge to the federal government is Medicaid coverage for illegal immigrants. In most states, the only Medicaid coverage available to illegal immigrants is what is known as emergency Medicaid. That is basically the same entitlement as other people in need of emergency care enjoy.
A 1986 federal law requires hospitals to provide emergency care to people in need regardless of ability to pay. The following is an explanation from the Centers for Medicare and Medicaid Services (CMS):
Section 1867 of the Social Security Act imposes specific obligations on Medicare-participating hospitals that offer emergency services to provide a medical screening examination (MSE) when a request is made for examination or treatment for an emergency medical condition (EMC), including active labor, regardless of an individual’s ability to pay. Hospitals are then required to provide stabilizing treatment for patients with EMCs.
Illegal immigrants too are covered under EMTALA, the federal law requiring emergency care. For example, an illegal immigrant woman showing up at the emergency department in labor will receive labor & delivery care, often paid for by Medicaid. The same woman will likely not receive prenatal care months before delivery, unless it is funded by the state, county, or a public hospital.
States can enroll whomever they please into Medicaid at their own expense. Only selected beneficiaries’ expenses are offset by matching funds, however. Some states, such as Minnesota, Colorado, California, and Illinois expanded Medicaid to cover undocumented workers at their own expense. Many of these are regretting their decisions according to WSJ:
Progressive governors around the country have extended state-funded healthcare to undocumented immigrants, aiming to get closer to universal insurance coverage.
Now, some are being forced to roll back or freeze the programs because of budget woes and unexpectedly high enrollment.
California Governor Newsom, who is trying to change his image to a more reasonable politician after decades as a Left Progressive, has floated the idea of freezing enrollment in California and requiring existing enrolled illegal immigrants to pay $100 a month towards their own coverage. Minnesota lawmakers too found themselves having to make tough decisions after budget shortfalls. A bill to end Medicaid eligibility for undocumented adults was sent to governor in early June. The following is from the Minneapolis Star Tribune:
In Minnesota, the state’s fiscal challenge provided GOP politicians with the ammunition they needed to force a retraction of benefits to undocumented immigrants that DFLers created two years ago when they had trifecta control.
The Republican argument was simple and, on the surface, sensible: With the state facing a prospective budget deficit two years out, a first option to rein in spending should be to limit publicly funded insurance benefits to undocumented immigrants.
The same financial problems plagued Illinois, according to the WSJ:
Illinois Gov. JB Pritzker recently signed off on a state budget that cut funding for health coverage of undocumented adults ages 42-64. Benefits will end for that group at the end of June. The program was initially expected to cost $112 million annually, but quickly ballooned to a projected $800 million a year that was “unsustainable,” a spokesman for Pritzker said.
States that expanded Medicaid during the Pandemic found the costs higher than anticipated, in addition to higher enrollment than anticipated. While under the Biden Administration, CMS was not necessarily scrutinizing matching funds to ensure only those eligible were covered, the Trump Administration is looking to make sure it doesn’t reimburse ineligible beneficiaries, including illegal immigrants:
Under federal law, federal Medicaid funding is generally only available for emergency medical services for noncitizens with unsatisfactory immigration status who would otherwise be Medicaid-eligible, but some states have pushed the boundaries, putting taxpayers on the hook for benefits that are not allowed.
Public opinion polls show shrinking support for Medicaid coverage for illegal immigrants, especially during uncertain economic times and a potential downturn. Opinions will likely turn even more negative if tax increases or service cuts in other areas are required.
WSJ: Democratic States Expanded Medicaid to Undocumented Immigrants. Now They’re Rolling It Back.