By Sanna Wilber, Managing Editor
Photo: Navy Medicine on Unsplash
On July 4th, 2025, President Trump signed into law the One Big Beautiful Bill Act (OBBBA). At the end of June, as the bill ricocheted between the House and the Senate, our timelines were barraged by political pundits analyzing its far-reaching effects. However, the subject that garnered the most bipartisan attention was changes in federally funded health insurance programs. The bill proposed significant changes to both Medicaid and the Affordable Care Act Marketplace—a proposition that was largely met with concern from Americans across the political spectrum. The Congressional Budget Office estimated that the cuts to Medicaid would amount to $700 billion and result in more than 10 million people losing healthcare coverage (Kearney et al. 2025).
However, the nature of that loss—how it would be implemented and when—has largely been underreported as Americans anticipate changes in their ability to access healthcare. Additionally, as the bill traveled between chambers, many of the proposals that were making headlines were altered, dropped, or otherwise accomplished administratively. While the majority of people who rely on federally funded healthcare are citizens, it is also a prerogative of the government to provide healthcare for immigrants. Following OBBBA, the federal government has changed which legally residing noncitizens and undocumented individuals are eligible for coverage. This has left states scrambling as they face decreased support for programs that had previously ensured access to healthcare for everyone, including most noncitizens. Yet, questions abound: Which programs are anticipating the highest cuts and who will be impacted? Additionally, how will this affect New York state, which has the 4th highest population of unauthorized immigrants nationwide and the second largest enrollment in Medicaid? (Venditti 2025; New York State Division of Budget 2025).
The question of who should benefit from tax funded services is a contentious debate; especially whether noncitizens and people with irregular migration should qualify for these services. Political debates aside, the ongoing litigation and constant changes in policies regarding immigration have made previously standard medical access unpredictable for these communities. For instance, under OBBBA, what constitutes a qualified immigrant has changed. Under this new definition, previously recognized categories such as refugees, asylees, parolees, and persons in temporary protected status are no longer eligible for Medicaid coverage. However, children and pregnant women are exempt from these changes and can expect to receive healthcare coverage (Bronner 2025). While there is a “grace period” as states adapt to the OBBBA provisions, this change in Medicaid eligibility is effective October 1, 2026 (Welcome.US 2025).
The second change in eligibility is who is able to buy into federally subsidized insurance. Effective January 1, 2027, most legally residing noncitizens will no longer be able to access Marketplace insurance through federally funded subsidies that were qualified under the Affordable Care Act (Welcome.US 2025). Known as the Essential Plan in New York state, this program provides coverage for people who may not qualify for Medicaid but still need assistance covering the oftentimes exorbitant monthly premiums. Currently, in New York state alone, 500,000 noncitizens will lose access to health insurance via the ACA due to OBBBA.
Alarmingly, a number of noncitizens enrolled in the Essential Plan have likely already lost access to their insurance due to administrative changes from The Center for Medicare and Medicaid Services (CMS). Noncitizens who are in the United States under the Deferred Action for Childhood Arrivals (DACA)—more widely known as Dreamers—saw their ACA eligibility revoked earlier this year. CMS finalized the decision to strike Dreamers from the definition of “lawfully present” noncitizens, which makes DACA recipients ineligible to purchase coverage through the ACA Marketplaces ahead of the deadline from OBBBA. Additionally, the very existence of the DACA program is in limbo with ongoing litigation, putting the legal presence of Dreamers at risk once again (KFF 2025).
As the House and Senate added their signature provisions to OBBBA, policymakers wanted a penalty for states that allowed noncitizens access to federally funded healthcare. That penalty would take the form of lowering the state’s federal support for medicaid called FMAP. However, that penalty was struck down by the Senate Parliamentarian making the majority of the changes in health insurance an issue of eligibility (Bronner 2025).
While New York’s FMAP won’t be facing any penalties for insuring noncitizens through Medicaid, the removal of the provision came at a cost to other areas of federal funding. Noncitizen Emergency Care is funded through FMAP and covers medical treatment for noncitizens in life-threatening situations. Funding cuts may only be a small component to the healthcare revisions, yet in the case of noncitizen emergency care this effect will be acute; under the new rate, New York state would have lost over $200 million in federal assistance for noncitizen emergency care in 2024 (Bronner 2025).
As mentioned above, funding cuts are only one dimension of the changes in healthcare coverage for noncitizens—revisions in eligibility will be the primary cause for loss of healthcare coverage in the months to come. However, these two factors, combined with the changes in federal spending in New York state, will drive up monthly insurance costs for insureds across the board. Insurance programs benefit from having a large population of insureds in which the majority are healthy and only use insurance for annual doctors’ visits or the occasional blood test. While there will be a portion of insureds who are unhealthy, their bills will be the minority and the average medical bill will be balanced by the number of relatively healthy individuals. However, if a program loses a large number of its insureds—like Dreamers or other immigrants who were previously covered—the ratio of relatively healthy policy holders to unhealthy ones changes. Coupled with the broader changes in federal support for New York’s health economy and the ACA coverage nationally, this will potentially lead to less healthy individuals—with low healthcare spending—buying into the Marketplace. Without the balancing from the healthy insureds, the average yearly medical expenses will increase. This phenomenon, known as adverse selection, will drive up insurance premiums as insurers increase spending to match the needs of their needier policyholders (American Academy of Actuaries 2023). For Qualified Health Plans in New York State, the average family can expect a 4.5% increase in their monthly premiums which translates to $300 per month (Bronner 2025). Nationwide, due to other changes from OBBBA, ACA healthcare premiums are expected to increase by more than 75% in the next year (Simmons-Duffin 2025). Just as noncitizens lose access to federally subsidized insurance plans like the Essential Plan, buying into insurance will become more inaccessible as premiums increase in the next year.
As the provisions in OBBBA are implemented across the nation, New York State is considering its response. On May 9, 2025 NYS lawmakers closed on a $254 billion budget for the 2026 fiscal year. Under OBBBA, New York will have to recoup a projected $750 million in federal payments till the year’s end and $3-5 billion long term (New York State Division of Budget 2025). Changes in NYS’ federal support less than two months after the state agreed on a new budget has triggered varied responses from state leaders. Some conservative lawmakers see this as a chance for the state to embrace a more minimalist budget and address alleged insurance fraud. However, Hochul and other Democrats are scrambling to recoup the lost federal assistance. There were rumors that the state would hold a special legislative session so leaders could adjust the budget for the following year. However, NYS’ legislature authorized Hochul and the New York State Division of the Budget to adjust the budget before the regular session begins in January 2026 (Plants 2025).
As New York presses onward, politicians will continue reckoning with the changes OBBBA brings to healthcare. While many unauthorized immigrants and noncitizens will be dropped from Medicaid and other federally subsidized programs, NYC Care is still an option alongside Noncitizen Emergency Care if leadership allocates enough funds to make up for federal losses. The One Big Beautiful Bill Act is not a fleeting piece of legislation; its provisions have set states on a track towards greater self-reliance and limited federal support. Come November, New Yorkers will vote on a new mayor and next year upstate will join the city in deciding who will lead the Empire state. Yet, these elections are more than superating polarization and power grabs. They are opportunities for New Yorkers to truly parse through the partisanship and determine what policies will shape the future of wellbeing in New York—from the snowcapped Adirondacks to the jubilance of Uptown, we decide the future.
Sanna Wilber, Managing Editor for the Happy Medium, is a senior in political science with a global studies minor. She grew up in the Finger Lakes region of New York where she enjoyed being civically engaged from a young age; be that working with the village government or interning at the Cornell Cooperative Extension. Her current academic interests include Caribbean politics, healthcare access, and family-supportive policies. Outside of her academic pursuits Sanna enjoys painting, podcasts, and perpetually trying to attain fluency in Spanish. After graduating, she intends on getting a master’s degree in public health.
References
Bronner, Jillian. 2025. “An Analysis of the One Big Beautiful Bill Act (OBBA’s) Impact on Healthcare for New York.” Rockefeller Institute of Government,
Kearney, Audrey, et al. 2025 “KFF Health Tracking Poll: The Public’s View of Funding Reductions in Medicaid.” KFF. June 6. https://www.kff.org/medicaid/kff-health-tracking-poll-the-publics-views-of-funding-reductions-to-medicaid/.
KFF. 2025. “Federal Medical Assistance Percentage (FMAP) for Medicaid and Multiplier.” KFF. https://www.kff.org/medicaid/state-indicator/federal-matching-rate-and-multiplier/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Multiplier%22,%22sort%22:%22desc%22%7D.
KFF. 2025. “Key Facts on Deferred Action for Childhood Arrivals (DACA).” KFF. February 11. https://www.kff.org/racial-equity-and-health-policy/key-facts-on-deferred-action-for-childhood-arrivals-daca/.
New York State Division of the Budget. 2025. Healthcare: Expenditures & Projections, FY 2025. Albany, NY: New York State Division of the Budget. https://www.budget.ny.gov/pubs/archive/fy25/ex/book/healthcare.pdf.
New York State Division of Budget. 2025. First Quarterly Update, FY 2026 Enacted Budget Financial Plan. Albany, NY: New York State Division of the Budget. https://www.budget.ny.gov/pubs/archive/fy26/en/fy26fp-en-q1.pdf.
Plants, Ron. 2025. “NYS Democratic lawmakers to discuss the impact of federal funding cuts on state Medicaid, SNAP, climate programs.” 2WGRZ. July 10. https://www.budget.ny.gov/pubs/archive/fy26/en/fy26fp-en-q1.pdf.
Simmons-Duffin, Selena. 2025. “ACA health insurance will cost the average person 75% more next year, research shows.” NPR. July 18. https://www.npr.org/sections/shots-health-news/2025/07/18/nx-s1-5471281/aca-health-insurance-premiums-obamacare-bbb-kff.
Venditti, Bruno. 2024. “Mapped: Unauthorized Immigrants by State.” Visual Capitalist. June 6. https://www.visualcapitalist.com/mapped-unauthorized-immigrants-by-state/.
Welcome.US. 2025. “How the ‘big, beautiful bill’ impacts newcomers.” Welcome.US. August 5. https://welcome.us/explainers/how-the-big-beautiful-bill-impacts-newcomers.
2023. “Risk Pooling: How Health Insurance in the Individual Market Works.” American Association of Actuaries. June. https://actuary.org/wp-content/uploads/2017/11/RiskPoolingFAQ071417.pdf.
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