Fact Checking Immigrants, Health Care, and the 2025 Tax and Budget Law

Background

In response to widespread misinformation about the 2025 reconciliation law – particularly claims around health care cuts and immigrants – the National Immigration Law Center (NILC) has released the following resource. One common falsehood suggests that undocumented immigrants will lose health insurance eligibility under the new law. This claim is not only inaccurate but also serves to distract from the truth about this deeply unpopular legislation. This commentary addresses those misleading statements and clarifies why they are either highly distorted or entirely false.

Did undocumented immigrants lose eligibility under the reconciliation law?

No. For a full description of the law’s policies, see this series of fact sheets from NILC. Because undocumented immigrants have been unjustly excluded from the federal benefits their tax dollars pay for, going back decades, Congress was not able to change their eligibility. Instead, Congress ended federal funding for many lawfully present immigrants for Affordable Care Act (ACA) subsidies, the Supplemental Assistance Nutrition Program (SNAP), Medicare, Medicaid and the Children’s Health Insurance Program. 

The following groups of lawfully present immigrants lost eligibility for all of these programs:

• Refugees
• Asylum recipients
• People paroled into the U.S. for more than one year
• Survivors of trafficking and other crimes (people with T visas)
• Survivors of domestic violence (those with a petition under the Violence Against Women Act)
• People granted withholding of deportation/removal, and conditional entrants

The following groups of lawfully present immigrants lost eligibility for ACA subsidies:

• Green card holders who are in a Medicaid waiting period and earn under 100% of the federal poverty line
• People paroled into the U.S. for less than one year
• People with Temporary Protected Status
• People with a nonimmigrant visa
• People who have applied for T or U visas
• People  granted employment authorization
• Family Unity beneficiaries
• Individuals granted Deferred Enforced Departure or deferred action (excluding DACA recipients who are now excluded due to Trump administration regulations) 
• Individuals under the age of 14 with a pending application for adjustment of status, asylum, withholding of removal or for protection under the Convention Against Torture; 
• Individuals granted withholding of removal under the regulations implementing the Convention Against Torture
• Individuals with a pending or approved petition for classification as a Special Immigrant Juvenile.

Did the Congressional Budget Office say the law cuts spending on undocumented immigrants?

Mostly no. Those making these claims justify them by citing the Congressional Budget Office (CBO), the official scorekeeper for Congress. But they misrepresent the data. 

CBO issued a letter in August 2025 stating that 1.2 noncitizens will lose ACA subsidy eligibility because of the new restrictions on immigrants. 900,000 people will lose health coverage due to no longer having an eligible immigration status and 300,000 due to the ban on low income green card holders receiving ACA coverage while they are in a Medicaid waiting period. Some have falsely asserted that these people are undocumented, but CBO said no such thing. All of those people losing health coverage are among the list of lawfully present immigrants above.

The reconciliation law also included new red tape for those applying for coverage under the ACA. Previously, people who face challenges getting all the required documents together could receive health care for 90 days while navigating this complex process. The new law bans this flexibility, causing people to go without coverage instead. Some have falsely asserted that these people are ineligible immigrants but there is no evidence to suggest this is true. Most likely, these are people, such as older and unhoused Americans, who face challenges obtaining vital documents like birth certificates. 

Did the law cut off undocumented immigrants from emergency care funds?

No, it is states and hospitals that lose funds. Under federal law, someone in a medical emergency cannot be denied care. Doctors and hospitals that provide this care typically will get paid for this care afterwards by the patient’s insurance company or by a program like Medicaid. However, because many immigrants, both lawfully present and undocumented, are excluded from Medicaid, doctors would not ordinarily get paid for providing emergency care to them. 

Emergency Medicaid is a program to offset the costs of this legally required emergency care. It offers limited reimbursement, with the cost shared by states and the  federal government, for health care providers who treat someone who is ineligible for Medicaid of their immigration status. The 2025 reconciliation bill kept this program but reduced the federal share of funding for patients who would have been eligible for expanded Medicaid under the ACA. This will result in budget-crunched states and health care providers receiving $177 million less in federal funds, but it does not change eligibility for this important uncompensated care program. 

Some have similarly distorted a 2024 letter from CBO, which calculated state and federal governments spent $27 billion on Emergency Medicaid spending over a seven year period. But much of this money goes to lawfully present immigrants who are ineligible for Medicaid, which CBO did not break out. Because this program compensates health care providers for emergency care that had to be provided regardless of the patient’s ability to pay, no one should be losing eligibility for care as a result.

Did immigrants wrongfully get health care coverage and are now blocked from doing so?

Some politicians have taken to claiming that immigrants they do not like are actually undocumented and therefore losing medical care under the reconciliation law. For instance, people who are fleeing danger and have been granted parole or applied for asylum have been considered lawfully present under U.S. law for decades. Prior to the passage of the reconciliation law, such individuals could apply for subsidized private health insurance under the ACA. Deeming them to be undocumented because a policymaker disagrees with the current immigration laws is irresponsible and inaccurate.

Does the law close a “loophole” allowing coverage of undocumented immigrants?

No, it just cuts Medicaid funding for states. Under federal law, states are allowed to tax health care providers in order to fund their share of spending on the Medicaid program. This has been falsely portrayed by some as a “loophole” that frees up states funding for other health care programs, like those that cover health care for immigrants excluded from federal programs. The new reconciliation law limits these provider taxes, effectively cutting all federal Medicaid funding to states. This will lead to millions of people going without health insurance and has nothing to do with immigrants.

Attacking immigrants’ health care hurts everyone.

Make no mistake, these falsehoods are part of a broader attack on immigrants in the United States. The funds that could be going to people’s health care are instead going to immigration enforcement to terrorize communities. The Trump administration itself has taken away the immigration status and work authorization from 1.2 million people, depriving them of the health care and other important supports that come with being able to work and best contribute to their families and communities. Congress must take every step to repeal this harmful and unpopular law, as well as other longstanding harmful restrictions on immigrants’ access to health care, and not let these distractions deter them from doing so.