In recent times, the trio of Blue States—California, Illinois, and Minnesota—expanded taxpayer-funded healthcare to undocumented immigrants. However, they are now facing the need to reduce or freeze coverage as costs have skyrocketed beyond expectations.
All three states, led by Democratic governors, initially broadened health insurance availability for individuals living illegally in the country. But with budget deficits growing and enrollment numbers rising sharply, they are exploring measures to limit benefits for these groups.
“In what other countries can you just show up and receive full service from a government program?” asked California GOP Representative James Gallagher. He expressed his concerns about the financial strain on the state’s budget during a discussion with the Daily Caller News Foundation. “I can’t think of any other places that allow that.”
In California alone, the cost for immigrant healthcare hit $8.5 billion in 2024, with projections exceeding $12 billion for the following year.
“It’s just crazy,” Gallagher remarked. “It’s simply not sustainable, which has blown our budget to pieces.”
The expansion of Medi-Cal to undocumented minors began under then-Governor Jerry Brown in 2016. Under Gavin Newsom, eligibility was further extended to young adults in 2022, and by January 2024, all low-income undocumented immigrants were eligible for coverage.
Confronted with a significant budget shortfall, Newsom is now advocating for a freeze on new registrations for undocumented adults in Medi-Cal, the state’s Medicaid program, requiring those already enrolled to start paying a $100 monthly premium in 2027.
Illinois and Minnesota are grappling with similar budget challenges.
In Illinois, Governor JB Pritzker has passed a state budget that supports healthcare coverage for undocumented individuals aged 42 to 64. Initially estimated to cost around $112 million yearly, this program’s expenses have surged to an unsustainable forecast of $800 million annually.
Meanwhile, Minnesota, which had a projected $18 billion surplus when it launched healthcare for undocumented immigrants in 2023, is now contending with a looming $6 billion deficit by early 2025. The state expected around 7,700 undocumented immigrants to enroll, but over 20,000 had done so by April.
During budget talks in early June, Minnesota Democrats agreed to the GOP’s proposal to discontinue MinnesotaCare—the state Medicaid program for undocumented adults. This austerity plan is expected to save the state about $57 million in the next two years.
While the federal government typically reimburses states for most Medicaid expenditures, it does not cover costs for undocumented immigrant healthcare except in emergency situations. Liberal states face additional challenges because balanced budgets are a requirement.
Additionally, the move to cut taxpayer-funded healthcare for undocumented immigrants isn’t isolated to the states. In Washington, D.C., Mayor Muriel Bowser and local Democrats have proposed removing undocumented adults from the Healthcare Alliance program. This locally funded initiative currently provides support to around 27,000 adults, regardless of their immigration status.
