Beginning January 1, 2027, the 2025 reconciliation law restricts Affordable Care Act Marketplace subsidies exclusively to law-abiding permanent residents, Cuban and Haitian entrants, and individuals under Compacts of Free Association. The Congressional Budget Office estimates the 2027 provision will reduce federal spending by $91.4 billion and cause one million people to become uninsured by 2035.
Additionally, the law eliminated subsidized Marketplace access starting January 1, 2026, for lawfully present immigrants earning under 100% of the federal poverty level who are ineligible for Medicaid due to immigration status. The CBO estimates this earlier measure will reduce federal spending by $27.3 billion between 2026 and 2035 while leaving an additional 200,000 individuals uninsured.
Timeline of Marketplace Subsidy Restrictions
Under longstanding policy, undocumented immigrants remain ineligible for federally funded health coverage. The 2025 reconciliation law expands eligibility limits for federally funded health programs such as Medicare, Medicaid, the Children’s Health Insurance Program, and subsidized ACA Marketplaces. Starting January 1, 2026, subsidized coverage was removed for lawfully present immigrants earning less than 100% of the federal poverty level who are ineligible for Medicaid, including individuals caught in the five-year waiting period.
Beginning January 1, 2027, premium tax credits and income-based cost-sharing reductions are limited strictly to lawful permanent residents, green card holders, Cuban and Haitian entrants, and individuals residing in the U.S. under Compacts of Free Association. These groups are designated in guidance as “eligible noncitizens.” Consequently, eligibility is eliminated for numerous other lawfully present groups, including work visa holders and refugees and asylees who lack a green card.
Implementation and Verification Challenges
The Centers for Medicare and Medicaid Services issued guidance detailing how the federally facilitated exchange will verify immigrant eligibility for subsidies for the 2027 plan year Marketplace Open Enrollment Period, which begins November 1, 2026. State-based exchanges must also enforce these immigrant eligibility restrictions, though their outreach and immigration status verification procedures may differ from the federally facilitated exchange.
Immigrants who lose subsidy eligibility may still buy Marketplace coverage at full cost, though unsubsidized plans will likely remain unaffordable due to rising premiums and the expiration of enhanced premium tax credits. Further coverage losses could also affect individuals who remain eligible but face difficulties understanding or responding to documentation requests.
