Vice President JD Vance and other Republican leaders have recently asserted that Democrats are pushing government funding bills that would allocate as much as $1.5 trillion toward providing healthcare benefits for undocumented immigrants. This narrative has been prominent during government funding debates and related shutdown threats.

Vance said, Democrats want “a $1.5 trillion spending package, basically saying to the American people, ‘We want to give massive amounts of money, hundreds of billions of dollars, to illegal aliens for their health care, while Americans are struggling to pay their health care bills.’”

The actual Democratic budget proposals do not contain provisions granting free healthcare or expanded health benefits specifically to undocumented immigrants. The focus of these bills has been to maintain or expand subsidies for the Affordable Care Act (ACA) and to reverse certain Medicaid cuts. These proposals target legal residents and citizens, not those without legal status.

Federal law continues to bar undocumented immigrants from receiving federally funded health benefits, including through Medicaid, Medicare, CHIP, and ACA subsidies. The only exception is for necessary emergency care, where hospitals are reimbursed for treating anyone in need of lifesaving services, regardless of immigration status. 

Undocumented immigrants pay billions of dollars in taxes each year—contributing significantly to Social Security, Medicare, state, and local government revenues—while being ineligible for virtually all related benefits.

Undocumented immigrants pay various types of taxes in the United States:

• Payroll taxes: Many undocumented workers have taxes withheld from their paychecks for Social Security and Medicare, sometimes using Individual Taxpayer Identification Numbers (ITINs) or false Social Security numbers.
• Income taxes: Many file income tax returns with ITINs and pay additional federal and state income taxes.
• Sales and excise taxes: Like all residents, undocumented immigrants pay taxes on purchases including necessary goods, utilities, and gasoline.
• Property taxes: Whether they own or rent, they pay property taxes directly or through rent payments, as landlords pass on local property tax costs.

In 2022 alone, undocumented immigrants paid an estimated $96.7 billion in total U.S. taxes, broken down as follows:

• $59.4 billion in federal taxes
• $37.3 billion in state and local taxes
• $25.7 billion in Social Security taxes
• $6.4 billion in Medicare taxes
• $1.8 billion in unemployment insurance taxes.

Despite their substantial tax contributions, undocumented immigrants are largely barred from accessing federal public benefits:

• They are not eligible for Social Security, Medicare, Medicaid, or ACA marketplace subsidies—even if they pay into these programs through payroll taxes.
• The only benefits accessible are emergency services, such as emergency Medicaid or care required by federal law to be provided, like lifesaving treatment under EMTALA.
• This means their payroll tax contributions directly strengthen these public funds, benefiting U.S. citizens and legal residents, but they themselves cannot receive retirement, disability, or medical benefits unless their immigration status changes.

Democrats are fighting to extend the enhanced Affordable Care Act (ACA) premium tax credits because these subsidies have made health insurance affordable for over 20 million Americans. Allowing them to expire would lead to sharply higher premiums, large coverage losses, and significant financial harm to health providers.

The enhanced ACA subsidies, originally expanded during the pandemic through legislation like the American Rescue Plan Act and extended by the Inflation Reduction Act through 2025, lower the cost of health insurance for millions by capping premiums at affordable percentages of income and expanding eligibility to middle-income households including those earning above 400% of the federal poverty level.

If the enhanced ACA subsidies expire at the end of 2025, experts project:

• Average ACA premiums would more than double in 2026, with increases of about 114%, causing major financial strain for millions of enrollees.
• Approximately 4 to 7 million people could lose their health insurance as plans become unaffordable or individuals drop coverage.
• Rural areas would be especially hard hit, with premiums rising disproportionately and coverage losses magnified.
• Health providers could lose more than $32 billion in revenue next year, which would increase uncompensated care costs by about $7.7 billion, impacting hospitals, physician practices, and pharmacies, straining healthcare systems especially in vulnerable communities.
• Overall health insurance premiums in other sectors, such as employer-sponsored insurance, could increase because more uninsured people would rely on costly emergency care, driving up system-wide costs.

Democrats argue that permanently extending these tax credits is essential to protect working families, reduce uninsured rates, and maintain stability in the individual health insurance market.