President Donald Trump’s signature budget legislation would punish 14 states that offer health coverage to people in the U.S. without authorization.

The states, most of them Democratic-led, provide insurance to some low-income immigrants — often children — regardless of their legal status. Advocates argue the policy is both humane and ultimately cost-saving.

But the federal legislation, which Republicans have titled the “One Big Beautiful Bill,” would slash federal Medicaid reimbursements to those states by billions of dollars a year in total unless they roll back the benefits.

The bill narrowly passed the House on Thursday and next moves to the Senate. While enacting much of Trump’s domestic agenda, including big tax cuts largely benefiting wealthier Americans, the legislation also makes substantial spending cuts to Medicaid that congressional budget scorekeepers say will leave millions of low-income people without health insurance.

The cuts, if approved by the Senate, would pose a tricky political and economic hurdle for the states and Washington, D.C., which use their own funds to provide health insurance to some people in the U.S. without authorization.

Those states would see their federal reimbursement for people covered under the Affordable Care Act’s Medicaid expansion cut by 10 percentage points. The cuts would cost California, the state with the most to lose, as much as $3 billion a year, according to an analysis by KFF, a health information nonprofit that includes KFF Health News.

Together, the 15 affected places cover about 1.9 million immigrants without legal status, according to KFF. The penalty might also apply to other states that cover lawfully residing immigrants, KFF says.

Two of the states — Utah and Illinois — have “trigger” laws that call for their Medicaid expansions to terminate if the feds reduce their funding match. That means unless those states either repeal their trigger laws or stop covering people without legal immigration status, many more low-income Americans could be left uninsured.

The remaining states and Washington, D.C., would have to come up with millions or billions more dollars every year, starting in the 2027 fiscal year, to make up for reductions in their federal Medicaid reimbursements, if they keep covering people in the U.S. without authorization.

Behind California, New York stands to lose the most federal funding — about $1.6 billion annually, according to KFF.

California state Sen. Scott Wiener, a Democrat who chairs the Senate budget committee, said Trump’s legislation has sown chaos as state legislators work to pass their own budget by June 15.

“We need to stand our ground,” he said. “California has made a decision that we want universal health care and that we are going to ensure that everyone has access to health care, and that we’re not going to have millions of undocumented people getting their primary care in emergency rooms.”

California Gov. Gavin Newsom, a Democrat, said in a statement that Trump’s bill would devastate health care in his state.

“Millions will lose coverage, hospitals will close, and safety nets could collapse under the weight,” Newsom said.

In his May 14 budget proposal, Newsom called on lawmakers to cut some benefits for immigrants without legal status, citing ballooning costs in the state’s Medicaid program. If Congress cuts Medicaid expansion funding, the state would be in no position to backfill, the governor said.

Newsom questioned whether Congress has the authority to penalize states for how they spend their own money and said his state would consider challenging the move in court.

Utah state Rep. Jim Dunnigan, a Republican who helped spearhead a bill to cover children in his state regardless of their immigration status, said Utah needs to maintain its Medicaid expansion that began in 2020.

“We cannot afford, monetary-wise or policy-wise, to see our federal expansion funding cut,” he said. Dunnigan wouldn’t say whether he thinks the state should end its immigrant coverage if the Republican penalty provision becomes law.

Utah’s program covers about 2,000 children, the maximum allowed under its law. Adult immigrants without legal status are not eligible. Utah’s Medicaid expansion covers about 75,000 adults, who must be citizens or lawfully present immigrants.

Matt Slonaker, executive director of the Utah Health Policy Project, a consumer advocacy organization, said the federal House bill leaves the state in a difficult position.

“There are no great alternatives, politically,” he said. “It’s a prisoner’s dilemma — a move in either direction does not make much sense.”

Slonaker said one likely scenario is that state lawmakers eliminate their trigger law then find a way to make up the loss of federal expansion funding.

Utah has funded its share of the cost of Medicaid expansion with sales and hospital taxes.

“This is a very hard political decision that Congress would put the state of Utah in,” Slonaker said.

In Illinois, the GOP penalty would have even larger consequences. That’s because it could lead to 770,000 adults’ losing the health coverage they gained under the state’s Medicaid expansion.

Stephanie Altman, director of health care justice at the Shriver Center on Poverty Law, a Chicago-based advocacy group, said it’s possible her Democratic-led state would end its trigger law before allowing its Medicaid expansion to terminate. She said the state might also sidestep the penalty by asking counties to fund coverage for immigrants. “It would be a hard situation, obviously,” she said.

Altman said the House bill appeared written to penalize Democratic-controlled states because they more commonly provide immigrants coverage without regard for their legal status.

She said the provision shows Republicans’ “hostility against immigrants” and that “they do not want them coming here and receiving public coverage.”

U.S. House Speaker Mike Johnson said this month that state programs that provide public coverage to people regardless of immigration status serve as “an open doormat,” inviting more people to cross the border without authorization. He said efforts to end such programs have support in public polling.

A Reuters-Ipsos poll conducted May 16-18 found that 47% of Americans approve of Trump’s immigration policies and 45% disapprove. The poll found that Trump’s overall approval rating has sunk 5 percentage points since he returned to office in January, to 42%, with 52% of Americans disapproving of his performance.

The Affordable Care Act, widely known as Obamacare, enabled states to expand Medicaid to adults with incomes of up to 138% of the federal poverty level, or $21,597 for an individual this year. Forty states and Washington, D.C., expanded, helping reduce the national uninsured rate to a historic low.

The federal government now pays 90% of the costs for people added to Medicaid under the Obamacare expansion.

In states that cover health care for immigrants in the U.S. without authorization, the Republican bill would reduce the federal government’s contribution from 90% to 80% of the cost of coverage for anyone added to Medicaid under the ACA expansion.

By law, federal Medicaid funds cannot be used to cover people who are in the country without authorization, except for pregnancy and emergency services.

The other states that use their own money to cover people regardless of immigration status are Colorado, Connecticut, Maine, Massachusetts, Minnesota, New Jersey, Oregon, Rhode Island, Vermont, and Washington, according to KFF.

Ryan Long, director of congressional relations at Paragon Health Institute, an influential conservative policy group, said that even if they use their own money for immigrant coverage, states still depend on federal funds to “support systems that facilitate enrollment of illegal aliens.”

Long said the concern that states with trigger laws could see their Medicaid expansion end is a “red herring” because states have the option to remove their triggers, as Michigan did in 2023.

The penalty for covering people in the country without authorization is one of several ways the House bill cuts federal Medicaid spending.

The legislation would shift more Medicaid costs to states by requiring them to verify whether adults covered by the program are working. States would also have to recertify Medicaid expansion enrollees’ eligibility every six months, rather than once a year or less, as most states currently do.

The bill would also freeze states’ practice of taxing hospitals, nursing homes, managed-care plans, and other health care companies to fund their share of Medicaid costs.

The Congressional Budget Office said in a May 11 preliminary estimate that, under the House-passed bill, about 8.6 million more people would be without health insurance in 2034. That number will rise to nearly 14 million, the CBO estimates, after the Trump administration finishes new ACA regulations and if the Republican-led Congress, as expected, declines to extend enhanced premium subsidies for commercial insurance plans sold through Obamacare marketplaces.

The enhanced subsidies, a priority of former President Joe Biden, eliminated monthly premiums altogether for some people buying Obamacare plans. They are set to expire at the end of the year.

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

Tina Ewing-Wilson remembers the last time major Medicaid cuts slashed her budget.

In the late 2000s, during the Great Recession, the pot of money she and other Medi-Cal recipients depend on to keep them out of costly residential care homes shrank.

The only way she could afford help was to offer room and board to a series of live-in caregivers who she said abused alcohol and drugs and eventually subjected her to financial abuse. She vowed to never rely on live-in care again.

Now the 58-year-old Republican from the Inland Empire is worried Medicaid cuts being mulled by her party in Washington could force her into another vulnerable spot.

“If they reduce my budget, that doesn’t change the fact that I need 24-hour care,” said Ewing-Wilson, who has struggled with seizures and developmental disabilities her entire life. “If they cut it too much, people will die or they’ll lose their freedoms.”

Similar stories have already surfaced in GOP-held swing districts nationwide where activists have been applying political pressure to sway vulnerable House members from supporting $880 billion in cuts that health experts say would almost certainly hit safety net programs. But in California, which sends more Republicans to Congress than any state west of Texas, consumer groups and health industry giants are joining forces in a quieter campaign to lobby lawmakers in solidly red districts, some of which they say would be disproportionately affected if those cuts materialize.

Organizers are trying to highlight a thorny fact that faces many conservative members as they navigate a complex decision: The scale of spending cuts top GOP leaders are demanding is nearly impossible to achieve without slashing Medicaid funds to states, which are a lifeline for their largely poor, rural districts. In Rep. Doug LaMalfa’s northern Sierra district stretching to the Oregon border, for example, some 43% of residents are enrolled in Medi-Cal, while 48% of residents in Rep. Jay Obernolte’s district, centered on San Bernardino County, rely on Medi-Cal.

“The hospitals, the health plans — we don’t always get along with those folks,” said Dustin Corcoran, CEO of the powerful California Medical Association, which represents more than 55,000 doctors and encouraged its members to call their representatives. “On this, there’s not a lot of daylight. It will take strange bedfellows, for sure.”

The California Hospital Association has sent letters to Republican lawmakers and encouraged executives of its more than 400 member hospitals to reach out or provide tours to them. Consumer advocates and patient groups have protested outside members’ district offices and community health center CEOs have requested private meetings.

The House of Representatives in February approved a budget framework tasking the committee overseeing Medicaid to cut $880 billion over 10 years. While there are still no specific provisions cutting Medicaid, Medicare, or other safety net programs, health care analysts say the magnitude of the spending reductions means they’re inevitable. They could force millions of Californians off Medi-Cal (the state’s Medicaid program covers roughly 15 million people), reduce benefits for those still enrolled, and lower reimbursement rates for physicians at a time of acute provider shortages, said Kristof Stremikis, director of market analysis and insight for the California Health Care Foundation, a nonprofit that advocates on health care policy.

“What you’re talking about at the end of the day is reductions in funding that the states, including California, are in no position to make up,” Stremikis said. “You see that reflected in the different groups that have come together to talk about how important this program is.”

Even before Congress approved its controversial budget plan, Corcoran said, doctors and other industry representatives had been holding weekly calls for months to discuss how to protect Medicaid funding following Republicans’ substantial wins in November. Corcoran has also rallied physicians’ groups out of state, sending a joint letter to House leaders in February. The group has asked individual doctors to call or write their congressional representatives as well.

Many Republican lawmakers appear to be lying low while home after House leadership advised GOP members against holding in-person town halls, blaming Democratic activists for “hijacking” the events. A viral clip showed Obernolte getting booed down by constituents at a district event.

Meanwhile, LaMalfa said on the House floor in February that the spending resolution, which all nine California Republicans voted for, does not cut Medicaid, Medicare, or other social safety net programs.

“Any claim to the contrary is actually fearmongering, plain and simple, or I guess in my neighborhood it would be known as a lie,” he said.

Neither LaMalfa nor Obernolte responded to requests for comment.

Jo Campbell, who runs a federally qualified health center in LaMalfa’s district, said she has invited the lawmaker to join her and other local clinic executives to explain how the federal government can cut the $880 billion without touching funding crucial to health centers like hers.

“We all kind of live financially on a knife’s edge,” said Campbell, CEO of Hill Country Community Clinic, roughly half of whose patients rely on Medi-Cal. “It could mean the difference of whether or not we keep our doors open.”

Campbell hasn’t heard back from LaMalfa’s office.

Executives at Adventist Health, which has 23 hospitals across California, have met with Central Valley Republican Reps. Vince Fong and David Valadao and have requested a meeting with LaMalfa, with whom they worked closely after one of its hospitals burned in the 2018 Camp Fire.

“They’re all at different places,” said Adventist spokesperson Julia Drefke. “I think they understand what it means for their community. What that translates to in terms of their vote could be a different thing.”

In 2023, Medi-Cal made up more than 80% of patient revenue at Surprise Valley Community Hospital in LaMalfa’s district, for example, and 64% of patient revenue at Loma Linda University Children’s Hospital, in Obernolte’s district, came from Medi-Cal, according to a CHCF analysis of state data.

Sabrina Epstein, a policy analyst with Disability Rights California, said she’s encouraging local activists, no matter where they live, to engage with California’s congressional Republicans.

“It only takes a few votes to keep Medicaid going, to protect it in Congress,” she said. “We don’t know where those votes are going to come from.”

Republicans — swing district or not — will now have to weigh the popularity of Medicaid among their constituents with pressure from national Republicans who see a once-in-a-generation opportunity to shrink the size of government and have shown little mercy for party members who fall out of line. More than three-quarters of Americans have a favorable opinion of Medicaid, according to a January KFF poll.

Complicating that calculation is the recent revelation by Gov. Gavin Newsom’s administration that California’s Medi-Cal program is billions of dollars short and relying on a loan to cover the overrun. Republican state legislators have singled out California’s decision to cover low-income residents regardless of legal status, although other factors have also contributed.

“The majority party decided to add billions of dollars to the cost of Medi-Cal and it was so nonsensical,” said GOP Assembly member Joe Patterson. “That’s a self-inflicted wound.”

Jenny McLelland, whose 13-year-old son has a breathing disability that requires round-the-clock care, said cutting benefits for immigrants would end up costing taxpayers more, when they show up in emergency rooms with more complicated ailments.

“I don’t buy the argument that other people are any less deserving of care than my son,” said McLelland, who lives in Clovis, part of Fong’s district. For her son, Medi-Cal is “a matter of life and death,” she added.

She believes if Fong understood how vital Medi-Cal is to families, he would work to make the system better.

It remains to be seen whether targeting House Republicans will change minds when a final budget package is voted on. Two vulnerable members — Valadao and Young Kim, who represents a district east of Anaheim — have signaled they’ll oppose major cuts to Medicaid. Rep. Ken Calvert, whose Palm Desert district office was targeted by protesters during the spring recess, said in a statement that he favors work requirements and would not support Medicaid cuts for “mothers, children, disabled, and low-income Americans.”

In Valadao’s district, state data shows, two-thirds of residents rely on Medi-Cal, which is the single biggest payer for all five general acute care hospitals there. That includes Adventist Health Delano, which derives two-thirds of patient revenue from Medi-Cal, according to the CHCF analysis.

Most other GOP House members remain silent.

Ewing-Wilson voted for Obernolte, who won reelection by 20 percentage points and is in little danger of losing. She’s been trying for weeks to get a meeting with him. If he votes to cut Medicaid, she said, “I will be very disappointed in him, because I voted for him, expecting that he would care about all of his constituents.”

This article was produced by KFF Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

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This article first appeared on KFF Health News and is republished here under a Creative Commons license.