1.4 Million Lawfully Present Immigrants Face Loss of Health Coverage Under New Law
A recently enacted tax and budget law is projected to result in approximately 1.4 million lawfully present immigrants losing health coverage, impacting access to both Affordable Care act (ACA) Marketplace plans and Medicare. The changes are being phased in over the next several years, beginning in late 2025.
The law significantly restricts eligibility for subsidized ACA Marketplace coverage, limiting it to Lawful Permanent Residents (LPRs), Cuban and Haitian entrants, and individuals residing in the U.S. under Compacts of free Association (COFA).This change will exclude a broad range of lawfully present immigrants currently eligible for coverage, including refugees, asylees without green cards, those wiht temporary Protected Status (TPS), and individuals on work visas.
Initially, DACA recipients will once again become ineligible to purchase ACA Marketplace coverage, with most states terminating coverage for currently enrolled individuals by September 30, 2025, following a Trump management rule finalized on June 25, 2025, that reinstates this ineligibility as of August 25, 2025.A further restriction, taking effect January 1, 2027, will extend these limitations to the broader group of lawfully present immigrants mentioned above.
The Congressional Budget Office (CBO) estimates that these ACA Marketplace provisions will lead to an additional one million individuals becoming uninsured and reduce federal spending by $91.4 billion between 2026 and 2035. The CBO also projects a $4.8 billion increase in federal revenue by 2034. Additionally, beginning January 1, 2026, lawfully present immigrants earning less than 100% of the Federal Poverty Level (FPL) who are ineligible for Medicaid due to their immigration status will also lose access to subsidized Marketplace coverage. Approximately 550,000 individuals with incomes under 100% FPL are currently enrolled in Marketplace plans and are likely to be affected. The CBO estimates this provision will result in an additional 200,000 uninsured individuals and a $27.3 billion reduction in federal spending over the same period, alongside a $176 million increase in federal revenue by 2034.
The law also impacts Medicare eligibility.Currently, lawfully present immigrants can qualify for Medicare based on work history, disability, or age, and those without sufficient work history can purchase Medicare Part A after five years of continuous legal residency. The new law will restrict Medicare eligibility to LPRs, Cuban and Haitian entrants, and those residing in the U.S.under COFA, excluding refugees, asylees without green cards, individuals with TPS, and those on work visas.Current Medicare beneficiaries subject to these new restrictions will lose coverage no later than 18 months after the law’s enactment (January 4,2027). The CBO estimates this will lead to 100,000 fewer individuals with Medicare coverage, a $5.1 billion reduction in federal spending, and a $123 million decrease in federal revenue by 2034.
