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Fact check: What are the estimated costs of providing free healthcare to undocumented immigrants in the US?
Executive Summary
Providing free or publicly funded health coverage to undocumented immigrants in the United States would likely represent a small but nontrivial addition to public spending, concentrated in particular states and programs rather than a uniform national cost; estimates vary from the hundreds of millions for a single state to billions for ongoing statewide programs, while per-person costs for immigrants are generally lower than for US-born adults [1] [2] [3]. Projections depend heavily on scope (full-scope Medicaid-like benefits versus emergency-only care), which populations are included, federal match rules, and state policy choices; shifts in federal incentive structures could move tens of billions in costs between federal and state budgets over a decade [4] [5].
1. A single-state experiment shows the price tag can be large but manageable — California as a test case
California’s official analysis estimated that expanding full-scope Medi-Cal to all otherwise-eligible undocumented adults would cost about $790 million General Fund in the first year and $2.1 billion General Fund on an ongoing basis, translating to nearly $870 million and $2.4 billion when counting all funds in 2021–22 [1]. That finding illustrates how state-level policy decisions drive costs, since a populous, higher-cost state like California yields substantial totals even though per-enrollee spending can be modest. The California numbers reflect program design choices — eligibility thresholds, benefit arrays, and whether the state absorbs costs without additional federal matching — and they provide a concrete benchmark for other large states to model their own fiscal exposure [6].
2. Per-person costs are lower for immigrants than for US-born adults — the utilization story matters
Multiple analyses find that immigrants, including undocumented populations, often have lower annual health expenditures than US-born residents; a JAMA Network Open study estimated public insurance costs at roughly $3,800 per immigrant per year, less than half the corresponding cost for US-born adults, and Kaiser data show immigrants spend about two-thirds as much overall [2] [3]. These utilization patterns — fewer office visits, lower prescription and inpatient use — mean that extending coverage will not produce a one-to-one increase in per-capita government spending compared with current averages. Lower utilization moderates projected costs, but policymakers must also factor in pent-up demand, preventive care uptake, and local price levels, all of which can raise initial-year costs above steady-state per-capita estimates.
3. Emergency-only spending is tiny — but the policy choice creates inefficiencies and costs elsewhere
Emergency Medicaid spending for undocumented immigrants represented only about 0.4% of total Medicaid expenditures in 2022, indicating emergency-only coverage is a small slice of current Medicaid outlays and that cutting such spending offers limited aggregate savings [7]. However, relying on emergency care produces poorer health outcomes and higher per–episode costs, and it shifts costs to hospitals, uncompensated care pools, and local governments. The small share therefore understates the broader system impact of excluding undocumented people from routine care: emergency-only coverage keeps headline costs low but creates inefficiencies and unpredictable local fiscal pressures that are not captured by program-level totals [7] [5].
4. Federal policy and matching formulas can flip the fiscal burden between Washington and the states
Cost estimates are highly sensitive to federal Medicaid matching rates and any policy penalties or incentives attached to state decisions to cover undocumented residents. One analysis warned that reducing federal match for states that cover undocumented immigrants could shift $92 billion from federal to state budgets over ten years if states maintain their programs, demonstrating that fiscal incidence depends on federal rules as much as enrollment numbers [4]. Thus, national discussions about “costs” must separate pure programmatic spending from who ultimately pays: the same coverage package can be far more expensive for states under a punitive federal match regime than under current rules [4] [5].
5. Tools, uncertainty, and the path forward — estimates vary and depend on design choices
Researchers have developed simulation tools to estimate costs and outcomes under different coverage options, but these tools underline substantial uncertainty tied to data limits, behavioral responses, and policy design choices [5]. International perspectives argue for universal coverage on equity and public-health grounds, but European analyses emphasize the political and logistical work required to extend entitlements to undocumented populations [8]. In short, credible estimates range from modest per-person annual costs and targeted state-level budgets to multi-billion-dollar ongoing programs in large states, depending on who is included, what benefits are offered, and how federal funding rules are structured [1] [2] [4].