Lawfully present immigrants lose Medicare despite decades of payments

Rosa María Carranza’s Case

Rosa María Carranza, a 67-year-old child development professional from Oakland, California, has contributed to the U.S. economy through her work in child care and education for over 24 years. As a lawfully present immigrant with Temporary Protected Status (TPS), she has paid into Medicare and Social Security, amassing significant contributions. Under the One Big Beautiful Bill Act (OBBBA), signed into law by President Donald J. Trump in July 2025, Carranza will lose Medicare coverage effective January 4, 2026. This disenrollment affects approximately 100,000 lawfully present immigrants, including TPS holders, refugees, asylum-seekers, and trafficking survivors, despite their legal status and long-term tax contributions.

Broader Implications of the OBBBA

Carranza’s case reflects a broader issue. She fled El Salvador in 1991 during its civil war, overstayed her visa, and qualified for TPS after earthquakes displaced 1.3 million people in 2001. Her work in child care and co-founding an outdoor preschool has impacted communities in the U.S., yet she now faces the loss of Medicare coverage, which she relies on for managing chronic conditions such as high blood pressure and arthritis. “Removing Medicare for lawfully present immigrants is unprecedented and could lead to delayed care for older adults, increasing emergency hospitalizations and straining healthcare systems.”

Financial Impact of the OBBBA

“Removing Medicare for lawfully present immigrants is unprecedented and could lead to delayed care for older adults, increasing emergency hospitalizations and straining healthcare systems.”

The OBBBA, passed via congressional reconciliation, marks a significant shift in U.S. healthcare policy. Signed by Trump in July 2025, the law prohibits certain lawfully present immigrants from accessing Medicare, Medicaid, and Affordable Care Act (ACA) subsidies while also reducing funding for health programs. The Congressional Budget Office (CBO) estimates Medicare restrictions alone will cut federal spending by $5.1 billion by 2034, with broader health program cuts totaling $1 trillion over the decade. These cuts include a 4% annual reduction in Medicare provider payments starting in 2026, triggered by Statutory Pay-As-You-Go (PAYGO) sequestration, and a temporary block on improvements to Medicare Savings Programs (MSPs), which assist low-income beneficiaries with premiums and out-of-pocket costs.

Legal and Political Debate

The law’s financial impact extends to healthcare access. By excluding TPS holders and other lawfully present immigrants from Medicare, the OBBBA risks destabilizing healthcare systems for vulnerable populations. For instance, the law prevents Medicare from negotiating drug prices for orphan drugs, which treat rare diseases affecting fewer than 200,000 people. Critics argue these provisions prioritize fiscal austerity over public health, potentially worsening disparities for aging immigrants who have contributed to the U.S. economy for decades.

Impact on Legal Status

The OBBBA’s exclusion of lawfully present immigrants from Medicare and other programs has sparked legal and political debate. The law’s provisions, targeting TPS holders, refugees, asylum-seekers, and trafficking survivors, contradict the principle that individuals who pay into the system retain benefits. According to the Institute on Taxation and Economic Policy, undocumented immigrants paid $6.4 billion into Medicare in 2022, yet the policy focuses on lawfully present individuals, raising questions about its fiscal rationale. Health experts, including Drishti Pillai of KFF Health News, note this is the first time Congress has removed Medicare eligibility for a group, creating a precedent that could influence future policy.

State Responses and Advocacy

The disenrollment of lawfully present immigrants has also raised concerns about their legal status. Carranza fears losing her TPS designation, which could lead to deportation if the Trump administration terminates it. This creates a precarious situation for immigrants like her, who have built lives in the U.S. but now face the threat of losing both healthcare and legal residency. The policy’s impact is further complicated by the lack of clear guidance from federal agencies, as highlighted by the Center for Medicare Advocacy, which filed legal actions to demand transparency from the Social Security Administration and Centers for Medicare & Medicaid Services.

State-Level Mitigation Efforts

State governments and advocacy groups have sought to mitigate the OBBBA’s impact. California, home to the largest population of immigrant seniors, froze enrollment for TPS holders and others in state health programs due to budget constraints. However, Democratic lawmakers, including Assemblymember Mia Bonta, have pushed to expand Medi-Cal coverage for affected immigrants. Bonta argues the policy undermines the contributions of immigrants who have lived and worked in the U.S. for decades, calling for legislative solutions to retain coverage for older adults.

Fiscal and Policy Divides

“Bonta argues the policy undermines the contributions of immigrants who have lived and worked in the U.S. for decades, calling for legislative solutions to retain coverage for older adults.”

California Governor Gavin Newsom declined to backfill federal cuts to health programs, citing a $1.1 billion annual cost. This decision has left many lawfully present immigrants, like Carranza, without a clear pathway to retain benefits. Advocacy groups, such as the Partnership for a New American Economy, have highlighted the human cost of the policy, emphasizing that immigrants who have paid into the system should not be penalized for their legal status. These efforts underscore a broader debate about balancing fiscal responsibility and healthcare equity for vulnerable populations.

Policy Shifts and Human Toll

The OBBBA’s restrictions on Medicare eligibility for lawfully present immigrants reflect deeper divides in U.S. politics and policy. Critics, including libertarian think tank Cato Institute’s Michael Cannon, argue the law aligns with conservative priorities to limit government spending on social programs. However, advocates warn the policy risks exacerbating healthcare disparities for aging immigrants who have contributed to the U.S. economy. The case of Rosa María Carranza highlights the human toll of these policy shifts, as she navigates the intersection of immigration enforcement, healthcare access, and economic insecurity.

Long-Term Consequences

As the OBBBA’s provisions take effect, the long-term consequences for healthcare systems and immigrant communities remain uncertain. The policy’s impact on Medicare eligibility, combined with the lack of clear guidance for affected individuals, underscores the need for a more equitable approach to healthcare access. For Carranza and others like her, the challenge is not just to survive the disenrollment but to rebuild a life without the safety nets they have relied on for decades. The broader implications of this policy shift will likely shape debates about immigration, healthcare, and fiscal responsibility for years to come.