Three Blue States Trim Undocumented Immigrant Health Coverage Amid Budget Pressures

Three Democratic-led states with governors considered potential 2028 presidential contenders — California, Illinois, and Minnesota — have recently taken steps to reduce or freeze government-funded health coverage for undocumented immigrants. These measures largely respond to budget shortfalls associated with expanded healthcare access to this population.

The efforts also reflect ongoing intra-party debates within the Democratic Party on immigration policy, a contentious issue during recent elections and targeted by Republican opposition. In Minnesota, bipartisan legislation passed to end state-funded health coverage for undocumented adults through MinnesotaCare, a significant policy reversal from the previous year; however, children remain covered under the program.

California Governor Gavin Newsom's 2025-26 budget proposal includes freezing enrollment for new undocumented adult applicants in the state's Medicaid program, Medi-Cal, and introducing a monthly premium for undocumented adults starting in 2027. These changes stem from higher-than-anticipated costs linked to expanded Medi-Cal enrollment and state budget deficits attributed partially to trade tariffs and federal policies. Illinois plans to terminate its Health Benefits for Immigrant Adults program by mid-2025, as the program exceeded initial cost forecasts and budget constraints demand reductions.

While at least four other states continue to offer some healthcare coverage to undocumented adults, many states maintain access for undocumented children. These state-level adjustments coincide with federal proposals, under legislation supported by former President Trump, aiming to reduce Medicaid funding for states that cover undocumented immigrants. Immigrant advocacy groups warn these policy rollbacks risk harming overall healthcare infrastructure and public health outcomes.

Critics caution that such policy shifts could alienate segments of the Democratic base and suggest political calculations intertwined with immigration-related challenges ahead of the 2028 elections. Officials defend these measures as necessary budget realities in response to federal economic pressures and seek bipartisan compromise to address fiscal constraints. The evolving landscape underscores tensions between expanding access to healthcare for immigrant populations and managing state healthcare budgets amid changing federal policies.