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A New “Public Charge” Rule Affecting Immigrants Has Major Implications for Medicaid

Last week the Trump administration published its long-anticipated proposed “public charge” rule, which carries enormous implications for Medicaid and immigrants enrolled in the program. A public charge is an individual considered dependent on the government for subsistence. The proposal would radically expand the extent to which public benefits received by legal immigrants who are not yet citizens are used as evidence of public charge status. This status plays a role in determining admission into the United States, and adjusting legal residency to permanent “green card status.”

Current policy states that medical assistance counts as evidence of public charge only when it is used to pay for long-term institutional care. The rule, now in a 60-day comment period, would sweep away this approach. Enrollment for more than 12 months over a three-year period in virtually any forms of Medicaid  could be used as evidence in a public charge determination. Only Medicaid-covered emergency services (available to all immigrants, authorized or otherwise), and Medicaid enrollment and services provided in school settings to children with disabilities and other children would not count.

The administration’s proposed policy shift disincentivizes anything more than short-term enrollment to address immediate emergencies. The government has encouraged Medicaid enrollment by eligible legal immigrants in recent years, and the Migration Policy Institute estimates that more than 4 million legal U.S. residents who are not yet citizens receive Medicaid. Another nearly 9.6 million live in families in which a member (nearly always a U.S.-born child) is enrolled in Medicaid. Millions of these citizen children could be hurt by the “chilling effect” of this rule change that could lead parents to pull their still-eligible children out of Medicaid. The latest estimates put the coverage losses between 2.1 million and 4.9 million legal immigrants.

The logic behind the rule’s policy goal of “self-sufficiency” is difficult to understand. When it comes to health insurance, almost no American would be insured without considerable government help. Yet the rule classifies only Medicaid as a form of insurance at odds with self-sufficiency. Private insurance — even when subsidized by government through public grants such as the Children’s Health Insurance Program (CHIP), refundable tax credits for marketplace health plans, or tax breaks for individuals and employers with job-based insurance — is considered a sign of self-sufficiency. Why is only one form of subsidy equated with non-self-sufficiency?

Similarly, the proposed rule asserts that a sign of self-sufficiency where health is concerned is having enough cash on hand to deal with serious illness. Few could pass such a test, given that research suggests 62 percent of Americans have less than $1,000 cash on hand.

The exemption for school-based health care is an indication of a basic failure on the administration’s part to understand how Medicaid functions. In exempting Medicaid-financed services furnished in schools for children with education-related disabilities and others, the proposal seems to assume that Medicaid funds flow to schools as grants. Yet school-based health providers, like other providers participating in insurance, are paid for services provided to Medicaid beneficiaries. If families drop out of Medicaid, revenue disappears, not only for school-based clinics but for the pharmacies, children’s hospitals, physicians’ offices, clinics, physical therapy practices, and other health providers essential for children with special needs.

Finally, while the proposal exempts CHIP, it’s unclear what would happen to beneficiaries in states that have opted to implement CHIP as part of a Medicaid expansion rather than a separate program. Are children and pregnant women in these states — about half of all CHIP beneficiaries — subject to losing coverage or legal status? And in any case, is a family whose earnings amount to 140 percent of the federal poverty level — over the CHIP eligibility threshold — any more self-sufficient than one earning 135 percent of poverty and thus Medicaid-eligible?

If finalized in its current form, this public charge rule would have a dramatic impact not only on coverage, but also on access to health care and the overall stability of the health care system in thousands of communities across the nation.

A History of the “Public Charge” Concept

The public charge concept dates to the Immigration Act of 1882, which authorized federal authorities to refuse to admit people seeking to enter as legal immigrants at ports of entry if they were suspected of being dependent on the government for subsistence. The policy regained prominence in 1996 with enactment of the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA). IIRIRA broadened and strengthened public charge policy, extending the determination system to the point at which permanent legal residency status is sought. IIRIRA also clarified the factors that guide public charge determinations to include age, health, family status, assets and resources, financial status, education, and skills.

Because receipt of means-tested public benefits could be considered evidence of public charge status, Congress also included pubic charge provisions in the 1996 welfare reform law, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). That law clarified that certain legal immigrant categories such as refugees and asylees can use means-tested government benefits such as Medicaid without fear of retribution. PWRORA imposed a five-year wait for assistance, but subsequent legislation allowed states to waive this waiting period for children and pregnant women. As of 2017, 31 states had waived the waiting period. Thus, even as Congress reinvigorated public charge policy, it also mitigated the effects of this policy for many legal immigrant groups.

These Acts of Congress were followed by a Statement of Policy in 1999 by the Clinton administration clarifying how officials would treat receipt of means-tested government benefits when making public charge determinations in the case of nonexempt legal residents. Under this policy, the administration established medical assistance would count as evidence of public charge only when it was used to pay for long-term institutional care. Otherwise, enrollment would effectively be encouraged.

Publication Details

Publication Date: October 16, 2018

Sara Rosenbaum, "A New “Public Charge” Rule Affecting Immigrants Has Major Implications for Medicaid," To the Point (blog), Commonwealth Fund, Oct. 16, 2018.


Harold and Jane Hirsh Professor of Health Law and Policy, Milken Institute School of Public Health at the George Washington University