Regulating artificial intelligence, especially its use by health insurers, is becoming a politically divisive topic, and it’s scrambling traditional partisan lines.

Boosters, led by Trump, are not only pushing its integration into government, as in Medicare’s experiment using AI in prior authorization, but also trying to stop others from building curbs and guardrails. A December executive order seeks to preempt most state efforts to govern AI, describing “a race with adversaries for supremacy” in a new “technological revolution.”

“To win, United States AI companies must be free to innovate without cumbersome regulation,” Trump’s order said. “But excessive State regulation thwarts this imperative.”

Across the nation, states are in revolt. At least four — Arizona, Maryland, Nebraska, and Texas — enacted legislation last year reining in the use of AI in health insurance. Two others, Illinois and California, enacted bills the year before.

Legislators in Rhode Island plan to try again this year after a bill requiring regulators to collect data on technology use failed to clear both chambers last year. A bill in North Carolina requiring insurers not to use AI as the sole basis of a coverage decision attracted significant interest from Republican legislators last year.

DeSantis, a former GOP presidential candidate, has rolled out an “AI Bill of Rights,” whose provisions include restrictions on its use in processing insurance claims and a requirement allowing a state regulatory body to inspect algorithms.

“We have a responsibility to ensure that new technologies develop in ways that are moral and ethical, in ways that reinforce our American values, not in ways that erode them,” DeSantis said during his State of the State address in January.

Ripe for Regulation

Polling shows Americans are skeptical of AI. A December poll from Fox News found 63% of voters describe themselves as “very” or “extremely” concerned about artificial intelligence, including majorities across the political spectrum. Nearly two-thirds of Democrats and just over 3 in 5 Republicans said they had qualms about AI.

Health insurers’ tactics to hold down costs also trouble the public; a January poll from KFF found widespread discontent over issues like prior authorization. (KFF is a health information nonprofit that includes KFF Health News.) Reporting from ProPublica and other news outlets in recent years has highlighted the use of algorithms to rapidly deny insurance claims or prior authorization requests, apparently with little review by a doctor.

Last month, the House Ways and Means Committee hauled in executives from Cigna, UnitedHealth Group, and other major health insurers to address concerns about affordability. When pressed, the executives either denied or avoided talking about using the most advanced technology to reject authorization requests or toss out claims.

AI is “never used for a denial,” Cigna CEO David Cordani told lawmakers. Like others in the health insurance industry, the company is being sued for its methods of denying claims, as spotlighted by ProPublica. Cigna spokesperson Justine Sessions said the company’s claims-denial process “is not powered by AI.”

Indeed, companies are at pains to frame AI as a loyal servant. Optum, part of health giant UnitedHealth Group, announced Feb. 4 that it was rolling out tech-powered prior authorization, with plenty of mentions of speedier approvals.

“We’re transforming the prior authorization process to address the friction it causes,” John Kontor, a senior vice president at Optum, said in a press release.

Still, Alex Bores, a computer scientist and New York Assembly member prominent in the state’s legislative debate over AI, which culminated in a comprehensive bill governing the technology, said AI is a natural field to regulate.

“So many people already find the answers that they’re getting from their insurance companies to be inscrutable,” said Bores, a Democrat who is running for Congress. “Adding in a layer that cannot by its nature explain itself doesn’t seem like it’ll be helpful there.”

At least some people in medicine — doctors, for example — are cheering legislators and regulators on. The American Medical Association “supports state regulations seeking greater accountability and transparency from commercial health insurers that use AI and machine learning tools to review prior authorization requests,” said John Whyte, the organization’s CEO.

Whyte said insurers already use AI and “doctors still face delayed patient care, opaque insurer decisions, inconsistent authorization rules, and crushing administrative work.”

Insurers Push Back

With legislation approved or pending in at least nine states, it’s unclear how much of an effect the state laws will have, said University of Minnesota law professor Daniel Schwarcz. States can’t regulate “self-insured” plans, which are used by many employers; only the federal government has that power.

But there are deeper issues, Schwarcz said: Most of the state legislation he’s seen would require a human to sign off on any decision proposed by AI but doesn’t specify what that means.

The laws don’t offer a clear framework for understanding how much review is enough, and over time humans tend to become a little lazy and simply sign off on any suggestions by a computer, he said.

Still, insurers view the spate of bills as a problem. “Broadly speaking, regulatory burden is real,” said Dan Jones, senior vice president for federal affairs at the Alliance of Community Health Plans, a trade group for some nonprofit health insurers. If insurers spend more time working through a patchwork of state and federal laws, he continued, that means “less time that can be spent and invested into what we’re intended to be doing, which is focusing on making sure that patients are getting the right access to care.”

Linda Ujifusa, a Democratic state senator in Rhode Island, said insurers came out last year against the bill she sponsored to restrict AI use in coverage denials. It passed in one chamber, though not the other.

“There’s tremendous opposition” to anything that regulates tactics such as prior authorization, she said, and “tremendous opposition” to identifying intermediaries such as private insurers or pharmacy benefit managers “as a problem.”

In a letter criticizing the bill, AHIP, an insurer trade group, advocated for “balanced policies that promote innovation while protecting patients.”

“Health plans recognize that AI has the potential to drive better health care outcomes — enhancing patient experience, closing gaps in care, accelerating innovation, and reducing administrative burden and costs to improve the focus on patient care,” Chris Bond, an AHIP spokesperson, told KFF Health News. And, he continued, they need a “consistent, national approach anchored in a comprehensive federal AI policy framework.”

Seeking Balance

In California, Newsom has signed some laws regulating AI, including one requiring health insurers to ensure their algorithms are fairly and equitably applied. But the Democratic governor has vetoed others with a broader approach, such as a bill including more mandates about how the technology must work and requirements to disclose its use to regulators, clinicians, and patients upon request.

Chris Micheli, a Sacramento-based lobbyist, said the governor likely wants to ensure the state budget — consistently powered by outsize stock market gains, especially from tech companies — stays flush. That necessitates balance.

Newsom is trying to “ensure that financial spigot continues, and at the same time ensure that there are some protections for California consumers,” he said. He added insurers believe they’re subject to a welter of regulations already.

The Trump administration seems persuaded. The president’s recent executive order proposed to sue and restrict certain federal funding for any state that enacts what it characterized as “excessive” state regulation — with some exceptions, including for policies that protect children.

That order is possibly unconstitutional, said Carmel Shachar, a health policy scholar at Harvard Law School. The source of preemption authority is generally Congress, she said, and federal lawmakers twice took up, but ultimately declined to pass, a provision barring states from regulating AI.

“Based on our previous understanding of federalism and the balance of powers between Congress and the executive, a challenge here would be very likely to succeed,” Shachar said.

Some lawmakers view Trump’s order skeptically at best, noting the administration has been removing guardrails, and preventing others from erecting them, to an extreme degree.

“There isn’t really a question of, should it be federal or should it be state right now?” Bores said. “The question is, should it be state or not at all?”

Do you have an experience navigating prior authorization to get medical treatment that you’d like to share with us for our reporting? Share it with us here.

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• Click here to watch Rosenthal on ABC News Live.

KFF Health News Southern California correspondent Claudia Boyd-Barrett discussed how families of detainees by the U.S. Immigration and Customs Enforcement agency are struggling to find those who have been hospitalized on KQED’s The California Report on Feb. 10.

• Click here to hear Boyd-Barrett on The California Report.
• Read Boyd-Barrett’s “‘I Can’t Tell You’: Attorneys, Relatives Struggle To Find Hospitalized ICE Detainees.”

Céline Gounder, KFF Health News’ editor-at-large for public health, discussed a new study linking daily coffee or caffeinated tea intake to lower dementia risk on CBS News’ CBS Mornings on Feb. 10.

• Click here to watch Gounder on CBS Mornings.

KFF Health News senior correspondent Aneri Pattani discussed differing opinions within the addiction medicine community on WNO’s Louisiana Considered on Feb 6.

• Click here to hear Pattani on Louisiana Considered.
• Read Pattani’s “Inside the Battle for the Future of Addiction Medicine.”

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It’s all part of a drama that roiled the ACA’s 2026 open enrollment period. Congressional debate over whether to extend more generous subsidies made available under the Biden administration led to the longest-ever government shutdown and focused public attention on rising health care costs and the affordability issue.

The enhanced subsidies, which expanded eligibility both by lowering the percentage of household income people had to pay toward their care and removing an income cap, expired at the end of last year. As a result, just about everyone buying ACA coverage saw their costs increase. For some, what they paid toward premiums doubled or more, even though less generous subsidies remain in place.

Many experts expected ACA enrollment, which hit a record 24 million in 2025, to fall this time around.

“If you raise the price of something a whole lot, economics tell us that a lot of people will buy less of it or not buy at all,” said Katherine Hempstead, a senior policy officer with the Robert Wood Johnson Foundation.

Here are things to watch now:

Initial Numbers Aren’t Final

The Congressional Budget Office told lawmakers in December 2024 that not extending the enhanced subsidies would cause 2.2 million people to lose insurance in 2026, with further increases in following years. Analysts with the Wakely Consulting Group also estimated that millions would opt out of insurance for this year.

Data released Jan. 28 by federal officials showed a year-over-year drop of about 1.2 million enrollments across the federal healthcare.gov marketplace and those run by states. Overall, there were 23 million enrollees, including 3.4 million new to ACA coverage.

At about the same time last year, there were 24.2 million sign-ups, with 3.9 million new to the marketplaces.

But there’s more to it than those initial numbers.

For one thing, both years’ data was pegged to Jan. 15 for the federal marketplace, which closed its open enrollment period that day. But, the data for the states that run their own marketplaces included sign-ups in most cases only through Jan. 10 or 11, even though some held open enrollment until the end of the month. Thus, the numbers don’t reflect what might have happened in those last days. Was there a surge in state sign-ups? Or, conversely, did the marketplaces see more enrollees cancel their coverage?

Additionally, those initial numbers are a mix of newly minted ACA enrollees and existing customers, many of whom were auto-reenrolled for 2026 — which raises other issues.

For existing, reenrolled policyholders, the real figures won’t be known for weeks or months, when it becomes clear how many actually pay their premiums. Some consumers may not have focused on their reenrollment costs or may have hoped Congress would extend the subsidies.

That’s an important factor to keep in mind because the CBO and Wakely estimates of millions losing insurance were based on projections for full-year coverage, not initial sign-ups.

In the coming weeks, “consumers may find they really can’t afford the premiums and cancel their plans, while carriers may also cancel coverage for nonpayment,” said Pat Kelly, executive director of Your Health Idaho, a state-based ACA marketplace, during a Jan. 22 call with reporters.

Sharp Differences in State Enrollment Patterns

Changes are also afoot in the 19 other states (and the District of Columbia) that run their own exchanges, some of which have issued more detailed data about enrollment than the federal marketplace.

Most states saw lower enrollment for 2026 than the prior year, with the biggest drop in North Carolina, where sign-ups fell by nearly 22%, federal data shows.

In a few states — including New Mexico, Texas, California, and Maryland, as well as the District of Columbia — the number of people selecting ACA plans increased.

The jump was largest in New Mexico, with its initial number of people selecting plans up by nearly 14%. Increases were in the single digits in the other states and Washington, D.C.

New Mexico — uniquely — used its own tax dollars to fully offset the loss of the more generous federal tax subsidies for all consumers. A few other states, including California, Colorado, Maryland, and Washington, used state money to help some enrollees.

The State Marketplace Network, a collective of 22 state marketplaces supported by the National Academy for State Health Policy, said initial enrollment figures raise concern. Compared with the same time last year, outright plan cancellations are up 83% in Colorado, disenrollments are four times what they were in Idaho, and Virginia has seen cancellations double.

New enrollments are down 32% in California from the same period last year, according to data from the state. In Pennsylvania, people ages 55 to 64, the group with the highest premiums, and young people 26 to 34 are terminating their coverage in higher numbers than other age groups, state data shows.

“We have drastically higher rates of people dropping their coverage,” said Devon Trolley, executive director of the Pennsylvania Health Insurance Exchange Authority. “We had 70,000 drop in the last two months, from early retirees to small-business owners to farmers not knowing how to make ends meet.”

On Feb. 9, Pennsylvania released final numbers, showing enrollment dropped by about 2% from last year, although that figure masks some of the effects. The state says nearly 18% of enrollees dropped coverage altogether, with older and rural residents being the most likely to fall out.

Some Republicans credited Trump-administration-backed anti-fraud measures, which included a range of regulatory and legislative changes, for tightening the system. Although some of those actions were paused by a federal court and have not taken effect, those ACA critics, some of whom have produced controversial estimates that millions may have been improperly enrolled, say that’s behind the decline. They have previously blamed the more generous subsidies for unauthorized enrollments or ACA plan-switching by commission-seeking brokers.

States that run their own ACA marketplaces, however, reported little or no such unauthorized switching. Relative to the federal marketplace, the state-based ACA platforms employ additional safeguards to prevent brokers from accessing consumers’ coverage without authorization.

Among consumers not returning to the marketplace, the main reason is cost, said Mila Kofman, executive director of the DC Health Benefit Exchange Authority, which runs the district’s ACA marketplace.

“When we looked at who these folks are, half are small-business owners,” Kofman said. “They are not folks committing fraud.”

Lower Premiums, Higher Deductibles

Rather than sticking with automatic reenrollment, existing customers in many states shifted sharply into lower-priced “bronze” plans that come with higher deductibles than silver, gold, and platinum plans.

California saw 73% of renewing members who switched plans move to a bronze plan, up from 27% at the same time last year, the State Marketplace Network reported. In Maine, bronze enrollment now represents almost 60% of all plans purchased.

People are “looking at what works in their monthly budget, looking for that lower premium,” said Stacey Pogue, a senior research fellow at the Center on Health Insurance Reforms at Georgetown University. “Some might be crossing their fingers that they won’t need to meet their deductible.”

On average, bronze plans have an annual deductible of $7,500. All ACA plans are required to cover certain preventive services — such as some vaccinations, cancer screenings, and other tests — without a copayment or deductible, but most everything else is covered only after an annual deductible is met.

High deductibles can lead some patients to avoid seeking medical care, Hempstead said.

“People are terrified to use their care,” she said. “They may delay something until it’s more serious.”

She added that medical providers, including hospitals and doctors, are bracing for an increase in the number of insured patients who can’t afford to pay their deductibles.

“Everyone is anticipating that hospitals will have to give out more charity care, which will hurt their bottom lines and might lead them to have to lay off people or close or reduce services,” she said.

Are you struggling to afford your health insurance? Have you decided to forgo coverage? Click here to contact KFF Health News and share your story.

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The California Democrat came into office promising to fight for “guaranteed health care for all,” and he came close to achieving it. Really close. But as it turns out, that’s easier said than done when you’re juggling chronic budget deficits, rising health care costs, and shrinking federal support. 

Now he’s walking the fine line between keeping his early promises to progressives and being tarred as a reckless state executive who has stretched California’s spending beyond its means. 

After years of political infighting, Newsom and the Democratic-controlled legislature in 2024 broadened California’s Medicaid program, Medi-Cal, to all income-eligible children and adults regardless of immigration status. 

Now, he’s rolling back those expansions in the name of “fiscal prudence.” 

This year, California froze Medi-Cal enrollment for most adults without legal status, just two years after making them all eligible. On July 1, immigrants not eligible for federal Medicaid — both legal residents and those without authorization — will lose access to state dental coverage. Next year, they’ll have to start paying monthly premiums. 

Last month, Newsom proposed letting roughly 200,000 legal immigrants — asylees, refugees, and others — get cut off from Medi-Cal after Sept. 30, when the federal government will stop paying for them. 

Advocates are livid. 

Progressives say Newsom’s political ambitions — and perceived need to distance himself from the polarized topic of immigrant health care — go against his early pledges. 

“You’re clouded by what Arkansas is going to think, or Tennessee is going to think, when what California thinks is something completely different,” said California state Sen. Caroline Menjivar, chair of the budget subcommittee on health and human services. 

Meanwhile, Republicans and fiscal hawks have painted Newsom as a tax-and-spend Democrat prioritizing use of limited state funds on free health care for noncitizens. And Newsom has taken hits from the Trump administration accusing California of “gaming the system” to use federal funds for immigrant health services. 

He’s not the only governor grappling with this dilemma. And all 50 states, which are currently required to provide health coverage to refugees, asylees, and others, will have to decide whether to backfill that coverage for some 1.4 million legal immigrants starting Oct. 1, when a provision of the One Big Beautiful Bill Act kicks in and leaves states without federal reimbursement for their care.

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For a second year, the Democrat has asked state lawmakers to roll back coverage for some immigrants in the face of federal Medicaid spending cuts and a roughly $3 billion budget deficit that analysts warn could worsen if the artificial intelligence bubble bursts. Newsom has proposed that the state not step in when, starting in October, the federal government stops providing health coverage to an estimated 200,000 legal residents — comprising asylees, refugees, and others.

Progressive legislators and activists said the cost-saving measures are a departure from Newsom’s “health for all” pledge, while Republicans continue to skewer Newsom for using public funds to cover any noncitizens.

Newsom’s latest move would save an estimated $786 million this fiscal year and $1.1 billion annually in future years in a proposed budget of $349 billion, according to the Department of Finance.

State Sen. Caroline Menjivar, one of two Senate Democrats who voted against Newsom’s immigrant health cuts last year, said she worried the governor’s political ambition could be getting in the way of doing what’s best for Californians.

“You’re clouded by what Arkansas is going to think, or Tennessee is going to think, when what California thinks is something completely different,” said Menjivar, who said previous criticism got her temporarily removed from a key budget subcommittee. “That’s my perspective on what’s happening here.”

Meanwhile, Republican state Sen. Tony Strickland criticized Newsom for glossing over the state’s structural deficit, which state officials say could balloon to $27 billion the following year. And he slammed Newsom for continuing to cover California residents in the U.S. without authorization. “He just wants to reinvent himself,” Strickland said.

It’s a political tightrope that will continue to grow thinner as federal support shrinks amid ever-rising health care expenses, said Guian McKee, a co-chair of the Health Care Policy Project at the University of Virginia’s Miller Center of Public Affairs.

“It’s not just threading one needle but threading three or four of them right in a row,” McKee said. Should Newsom run, McKee added, the priorities of Democratic primary voters — who largely mirror blue states like California — look very different from those in a far more divided general electorate.

Americans are deeply divided on whether the government should provide health coverage to immigrants without legal status. In a KFF poll last year, a slim majority — 54% — were against a provision that would have penalized states that use their own funds to pay for immigrant health care, with wide variation by party. The provision was left out of the final version of the bill passed by Congress and signed by President Donald Trump.

Even in California, support for the idea has waned amid ongoing budget problems. In a May survey by the Public Policy Institute of California, 41% of adults in the state said they supported providing health coverage to immigrants who lack legal status, a sharp drop from the 55% who supported it in 2023.

Trump, Vice President JD Vance, other administration officials, and congressional Republicans have repeatedly accused California and other Democratic states of using taxpayer funds on immigrant health care, a red-meat issue for their GOP base. Centers for Medicare & Medicaid Services Administrator Mehmet Oz has accused California of “gaming the system” to receive more federal funds, freeing up state coffers for its Medicaid program, known as Medi-Cal, which has enrolled roughly 1.6 million immigrants without legal status.

“If you are a taxpayer in Texas or Florida, your tax dollars could’ve been used to fund the care of illegal immigrants in California,” he said in October.

California state officials have denied the charges, noting that only state funds are used to pay for general health services for those without legal status because the law prohibits using federal funds. Instead, Newsom has made it a “point of pride” that California has opened up coverage to immigrants, which his administration has noted keeps people healthier and helps them avoid costly emergency room care often covered at taxpayer expense.

“No administration has done more to expand full coverage under Medicaid than this administration for our diverse communities, documented and undocumented,” Newsom told reporters in January. “People have built careers out of criticizing my advocacy.”

Newsom warns the federal government’s “carnival of chaos” passed Trump’s One Big Beautiful Bill Act, which he said puts 1.8 million Californians at risk of losing their health coverage with the implementation of work requirements, other eligibility rules, and limits to federal funding to states.

Nationally, 10 million people could lose coverage by 2034, according to the Congressional Budget Office. Health economists have said higher numbers of uninsured patients — particularly those who are relatively healthy — could concentrate coverage among sicker patients, potentially increasing premium costs and hospital prices overall.

Immigrant advocates say it’s especially callous to leave residents who may have fled violence or survived trafficking or abuse without access to health care. Federal rules currently require state Medicaid programs to cover “qualified noncitizens” including asylees and refugees, according to Tanya Broder of the National Immigration Law Center. But the Republican tax-and-spending law ends the coverage, affecting an estimated 1.4 million legal immigrants nationwide.

With many state governors yet to release budget proposals, it’s unclear how they might handle the funding gaps, Broder said.

For instance, Colorado state officials estimate roughly 7,000 legal immigrants could lose coverage due to the law’s changes. And Washington state officials estimate 3,000 refugees, asylees, and other lawfully present immigrants will lose Medicaid.

Both states, like California, expanded full coverage to all income-eligible residents regardless of immigration status. Their elected officials are now in the awkward position of explaining why some legal immigrants may lose their health care coverage while those without legal status could keep theirs.

Last year, spiraling health care costs and state budget constraints prompted the Democratic governors of Illinois and Minnesota, potential presidential contenders JB Pritzker and Tim Walz, to pause or end coverage of immigrants without legal status.

California lawmakers last year voted to eliminate dental coverage and freeze new enrollment for immigrants without legal status and, starting next year, will charge monthly premiums to those who remain. Even so, the state is slated to spend $13.8 billion from its general fund on immigrants not covered by the federal government, according to Department of Finance spokesperson H.D. Palmer.

At a press conference in San Francisco in January, Newsom defended those moves, saying they were necessary for “fiscal prudence.” He sidestepped questions about coverage for asylees and refugees and downplayed the significance of his proposal, saying he could revise it when he gets a chance to update his budget in May.

Kiran Savage-Sangwan, executive director of the California Pan-Ethnic Health Network, pointed out that California passed a law in the 1990s requiring the state to cover Medi-Cal for legal immigrants when federal Medicaid dollars won’t. This includes green-card holders who haven’t yet met the five-year waiting period for enrolling in Medicaid.

Calling the governor’s proposal “arbitrary and cruel,” Savage-Sangwan criticized his choice to prioritize rainy day fund deposits over maintaining coverage and said blaming the federal government was misleading.

It’s also a major departure from what she had hoped California could achieve on Newsom’s first day in office seven years ago, when he declared his support for single-payer health care and proposed extending health insurance subsidies to middle-class Californians.

“I absolutely did have hope, and we celebrated advances that the governor led,” Savage-Sangwan said. “Which makes me all the more disappointed.”

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A week earlier, immigration agents had grabbed Julio César Peña from his front yard in Glendale, California. Now, he was in a hospital after suffering a ministroke. He was shackled to the bed by his hand and foot, he told Romero, and agents were in the room, listening to the call. He was scared he would die and wanted his wife there.

“What hospital are you at?” Romero asked.

“I can’t tell you,” he replied.

Viridiana Chabolla, Peña’s attorney, couldn’t get an answer to that question, either. Peña’s deportation officer and the medical contractor at the Adelanto ICE Processing Center refused to tell her. Exasperated, she tried calling a nearby hospital, Providence St. Mary Medical Center.

“They said even if they had a person in ICE custody under their care, they wouldn’t be able to confirm whether he’s there or not, that only ICE can give me the information,” Chabolla said. The hospital confirmed this policy to KFF Health News.

Family members and attorneys for patients hospitalized after being detained by federal immigration officials said they are facing extreme difficulty trying to locate patients, get information about their well-being, and provide them emotional and legal support. They say many hospitals refuse to provide information or allow contact with these patients. Instead, hospitals allow immigration officers to call the shots on how much — if any — contact is allowed, which can deprive patients of their constitutional right to seek legal advice and leave them vulnerable to abuse, attorneys said.

Hospitals say they are trying to protect the safety and privacy of patients, staff, and law enforcement officials, even while hospital employees in Los Angeles, Minneapolis, and Portland, Ore., cities where Immigration and Customs Enforcement has conducted immigration raids, say it’s made their jobs difficult. Hospitals have used what are sometimes called blackout procedures, which can include registering a patient under a pseudonym, removing their name from the hospital directory, or prohibiting staff from even confirming that a patient is in the hospital.

“We’ve heard incidences of this blackout process being used at multiple hospitals across the state, and it’s very concerning,” said Shiu-Ming Cheer, the deputy director of immigrant and racial justice at the California Immigrant Policy Center, an advocacy group.

Some Democratic-led states, including California, Colorado, and Maryland, have enacted legislation that seeks to protect patients from immigration enforcement in hospitals. However, those policies do not address protections for people already in ICE custody.

More Detainees Hospitalized

Peña is among more than 350,000 people arrested by federal immigration authorities since President Donald Trump returned to the White House. As arrests and detentions have climbed, so too have reports of people taken to hospitals by immigration agents because of illness or injury — due to preexisting conditions or problems stemming from their arrest or detention.

ICE has faced criticism for using aggressive and deadly tactics, as well as for reports of mistreatment and inadequate medical care at its facilities. Sen. Adam Schiff (D-Calif.) told reporters at a Jan. 20 news conference outside a detention center he visited in California City that he spoke to a diabetic woman held there who had not received treatment in two months.

While there are no publicly available statistics on the number of people sick or injured in ICE detention, the agency’s news releases point to 32 people who died in immigration custody in 2025. Six more have died this year.

The Department of Homeland Security, which oversees ICE, did not respond to a request for information about its policies or Peña’s case.

According to ICE’s guidelines, people in custody should be given access to a telephone, visits from family and friends, and private consultation with legal counsel. The agency can make administrative decisions, including about visitation, when a patient is in the hospital, but should defer to hospital policies on contacting next of kin when a patient is seriously ill, the guidelines state.

Asked in detail about hospital practices related to patients in immigration custody and whether there are best practices that hospitals should follow, Ben Teicher, a spokesperson for the American Hospital Association, declined to comment.

David Simon, a spokesperson for the California Hospital Association, said that “there are times when hospitals will — at the request of law enforcement — maintain confidentiality of patients’ names and other identifying characteristics.”

Although policies vary, members of the public can typically call a hospital and ask for a patient by name to find out whether they’re there, and often be transferred to the patient’s room, said William Weber, an emergency physician in Minneapolis and medical director for the Medical Justice Alliance, which advocates for the medical needs of people in law enforcement custody. Family members and others authorized by the patient can visit. And medical staff routinely call relatives to let them know a loved one is in the hospital, or to ask for information that could help with their care.

But when a patient is in law enforcement custody, hospitals frequently agree to restrict this kind of information sharing and access, Weber said. The rationale is that these measures prevent unauthorized outsiders from threatening the patient or law enforcement personnel, given that hospitals lack the security infrastructure of a prison or detention center. High-profile patients such as celebrities sometimes also request this type of protection.

Several attorneys and health care providers questioned the need for such restrictions. Immigration detention is civil, not criminal, detention. The Trump administration says it’s focused on arresting and deporting criminals, yet most of those arrested have no criminal conviction, according to data compiled by the Transactional Records Access Clearinghouse and several news outlets.

Taken Outside His Home

According to Peña’s wife, Romero, he has no criminal record. Peña came to the United States from Mexico in sixth grade and has an adult son in the U.S. military. The 43-year-old has terminal kidney disease and survived a heart attack in November. He has trouble walking and is partially blind, his wife said. He was detained Dec. 8 while resting outside after coming home from dialysis treatment.

Initially, Romero was able to find her husband through the ICE Online Detainee Locator System. She visited him at a temporary holding facility in downtown Los Angeles, bringing him his medicines and a sweater. She then saw he’d been moved to the Adelanto detention center. But the locator did not show where he was after he was hospitalized.

When she and other relatives drove to the detention facility to find him, they were turned away, she said. Romero received occasional calls from her husband in the hospital but said they were less than 10 minutes long and took place under ICE surveillance. She wanted to know where he was so she could be at the hospital to hold his hand, make sure he was well cared for, and encourage him to stay strong, she said.

Shackling him and preventing him from seeing his family was unfair and unnecessary, she said.

“He’s weak,” Romero said. “It’s not like he’s going to run away.”

ICE guidelines say contact and visits from family and friends should be allowed “within security and operational constraints.” Detainees have a constitutional right to speak confidentially with an attorney. Weber said immigration authorities should tell attorneys where their clients are and allow them to talk in person or use an unmonitored phone line.

One of his clients was Bayron Rovidio Marin, a car wash worker injured during a raid in August. Immigration agents surveilled him for over a month at Harbor-UCLA Medical Center, a county-run facility, without charging him.

In November, the Los Angeles County Board of Supervisors voted to curb the use of blackout policies for patients under civil immigration custody at county-run hospitals. In a statement, Arun Patel, the chief patient safety and clinical risk management officer for the Los Angeles County Department of Health Services, said the policies are designed to reduce safety risks for patients, doctors, nurses, and custody officers.

“In some situations, there may be concerns about threats to the patient, attempts to interfere with medical care, unauthorized visitors, or the introduction of contraband,” Patel said. “Our goal is not to restrict care but to allow care to happen safely and without disruption.”

Leaving Patients Vulnerable

Thompson-Lleras said he’s concerned that hospitals are cooperating with federal immigration authorities at the expense of patients and their families and leaving patients vulnerable to abuse.

“It allows people to be treated suboptimally,” Thompson-Lleras said. “It allows people to be treated on abbreviated timelines, without supervision, without family intervention or advocacy. These people are alone, disoriented, being interrogated, at least in Bayron’s case, under pain and influence of medication.”

Such incidents are alarming to hospital workers. In Los Angeles, two health care professionals who asked not to be identified by KFF Health News, out of concern for their livelihoods, said that ICE and hospital administrators, at public and private hospitals, frequently block staff from contacting family members for people in custody, even to find out about their health conditions or what medications they’re on. That violates medical ethics, they said.

Blackout procedures are another concern.

“They help facilitate, whether intentionally or not, the disappearance of patients,” said one worker, a physician for the county’s Department of Health Services and part of a coalition of concerned health workers from across the region.

At Legacy Emanuel Medical Center in Portland, nurses publicly expressed outrage over what they saw as hospital cooperation with ICE and the flouting of patient rights. Legacy Health has sent a cease and desist letter to the nurses’ union, accusing it of making “false or misleading statements.”

“I was really disgusted,” said Blaire Glennon, a nurse who quit her job at the hospital in December. She said numerous patients were brought to the hospital by ICE with serious injuries they sustained while being detained. “I felt like Legacy was doing massive human rights violations.”

Handcuffed While Unconscious

Two days before Christmas, Chabolla, Peña’s attorney, received a call from ICE with the answer she and Romero had been waiting for. Peña was at Victor Valley Global Medical Center, about 10 miles from Adelanto, and about to be released.

Excited, Romero and her family made the two-hour-plus drive from Glendale to the hospital to take him home.

When they got there, they found Peña intubated and unconscious, his arm and leg still handcuffed to the hospital bed. He’d had a severe seizure on Dec. 20, but no one had told his family or legal team, his attorney said.

Tim Lineberger, a spokesperson for Victor Valley Global Medical Center’s parent company, KPC Health, said he could not comment on specific patient cases, because of privacy protections. He said the hospital’s policies on patient information disclosure comply with state and federal law.

Peña was finally cleared to go home on Jan. 5. No court date has been set, and his family is filing a petition to adjust his legal status based on his son’s military service. For now, he still faces deportation proceedings.

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But two years ago, he heard about Peak Health, a new Advantage plan started by the West Virginia University Health System, where his doctors practice. It was cheaper and offered more personal attention, plus extras such as an allowance for over-the-counter pharmacy items. Those benefits are more important than ever, he said, as he’s treated for cancer.

“I decided to give it a shot,” said Wilkewitz, 79. “If I didn’t like it, I could go back to Humana or whatever after a year.”

He’s sticking with Peak Health. Members of Medicare Advantage plans, a privately run alternative to the government’s Medicare program, can change plans through the end of March.

Now entering its third year, Peak Health has tripled its enrollment since last year, to “north of 10,000,” said Amos Ross, its president. It expanded from 20 counties to 49, he said, and moved into parts of western Pennsylvania for the first time.

Although hospital-owned plans are only a sliver of the Medicare Advantage market, their enrollment continues to grow, reflecting the overall increase in Advantage members. Of the 62.8 million Medicare beneficiaries eligible to join Advantage plans, 54% signed up last year, according to KFF, the health information nonprofit that includes KFF Health News. While the number of Advantage plans owned by hospital systems is relatively stable, Mass General Brigham in Boston and others are expanding their service areas and types of plan offerings.

Health systems have dabbled in the insurance business for years, but it’s not for everyone. MedStar Health, serving the greater Washington, D.C., area, said it closed its Medicare Advantage plan at the end of 2018, citing financial losses.

“It’s a ton of work,” said Ross, who spent more than a decade in the commercial health insurance industry.

Like any other health insurer, hospitals entering the business need a back-office infrastructure to enroll patients, sign up providers, fill prescriptions, process claims, hire staff, and — most importantly — assure state regulators they have a reserve of money to pay claims. Once they get a state insurance license, they need approval from the federal Centers for Medicare & Medicaid Services to sell Medicare Advantage policies. Some systems affiliate with or create an insurance subsidiary, and others do most of the job themselves.

Kaiser Permanente, the nation’s largest nonprofit health system by revenue, started an experimental Medicare plan in 1981 and now has nearly 2 million people enrolled in dozens of Advantage plans in eight states and the District of Columbia. The Justice Department announced Jan. 14 that KP had agreed to pay $556 million to settle accusations that its Advantage plans fraudulently billed the government for about $1 billion over a nine-year period.

Last year, UCLA Health introduced two Medicare Advantage plans in Los Angeles County, the most populous county in the United States. Other new hospital-owned plans have cropped up in less profitable rural areas.

“These are communities that have been very hard for insurers to move into,” said Molly Smith, group vice president for public policy at the American Hospital Association.

But Advantage plans offered by hospitals have a familiar, trusted name. They don’t have to move into town, because their owners — the hospitals — never left.

Bad Breakups

Medicare Advantage plans usually restrict their members to a network of doctors, hospitals, and other clinicians that have contracts with the plans to serve them. But if hospitals and plans can’t agree to renew those contracts, or when disputes flare up — often spurred by payment delays, denials, or burdensome prior authorization rules — the health care providers can drop out.

These breakups, plus planned terminations and service area cuts, forced more than 3.7 million Medicare Advantage enrollees to make a tough choice last year: find new insurance for 2026 that their doctors accept or, if possible, keep their plan but find new doctors.

About 1 million of these stranded patients had coverage from UnitedHealthcare, the country’s largest health insurer. In a July earnings update for financial analysts, chief financial officer John Rex blamed the company’s retreat on hospitals, where “most encounters are intensifying in services and costing more.”

The turbulence in the commercial insurance market has upset patients as well as their providers. Sometimes contract disputes have been fought out in the open, with anxious patients in the middle receiving warnings from each side blaming the other for the imminent end to coverage.

When Fred Neary, 88, learned his doctors in the Baylor Scott & White Health system in central and northern Texas would be leaving his Medicare Advantage plan, he was afraid the same thing could happen again if he joined a plan from another commercial insurer. Then he discovered that the 53-hospital system had its own Medicare Advantage plan. He enrolled in 2025 and is keeping the plan this year.

A Health Affairs study that Rich co-authored in July found that enrollment in Advantage plans owned by hospital systems grew faster than traditional Medicare enrollment for the first time in 2023, though not as rapidly as the overall rise in sign-ups for all Advantage plans.

The massive UCLA Health system introduced its two Medicare Advantage plans in Los Angeles County in January 2025, even though patients already had a list of more than 70 Advantage plans to choose from. Before rolling out the plan, the University of California Board of Regents discussed its merits at a November 2024 meeting. The meeting minutes offer rare insight into a conversation that private hospital systems would usually hold behind closed doors.

“As increasing numbers of Medicare-enrolled patients turn to new Medicare Advantage plans, UC Health’s experience with these new plans has not been good, either for patients or providers,” the minutes read, summarizing comments by David Rubin, executive vice president of UC Health.

The minutes also describe comments from Jonathon Arrington, CFO of UCLA Health. “Over the years, in order to care for Medicare Advantage patients, UCLA has entered numerous contracts with other payers, and these contracts have generally not worked out well,” the minutes read. “Every two or three years, UCLA has found itself terminating a contract and signing a new one. Patients have remained loyal to UCLA, some going through three iterations of cancelled contracts in order to remain with UCLA Health.”

Costs to Taxpayers

CMS pays Advantage plans a monthly fixed amount to care for each enrollee based on the member’s health condition and location. In 2024, the federal government paid Advantage plans an estimated $494 billion to care for patients, according to the Medicare Payment Advisory Commission, which monitors the program for Congress.

The commission said this month that it projects insurers in 2026 will be paid 14%, or about $76 billion, more than it would have cost government-run Medicare to care for similar patients.

Many Democratic lawmakers have criticized overpayments to Medicare Advantage insurers, though the program has bipartisan congressional support because of its increasing popularity with Medicare beneficiaries, who are often attracted by dental care and other coverage unavailable through traditional Medicare.

Whenever Congress threatens cuts, insurers claim these generous federal payments are essential to keep Medicare Advantage plans afloat. UCLA Health’s Advantage plans will need at least 15,000 members to be financially sustainable, according to the meeting minutes. CMS data indicates that 7,337 patients signed up in 2025.

A study published in JAMA Surgery in August compared patients in commercial Medicare Advantage who had major surgery with those covered by Medicare Advantage plans owned by their hospital. The latter group had fewer complications, said co-author Thomas Tsai, an associate professor in the Department of Health Policy and Management at the Harvard T.H. Chan School of Public Health.

Smith, of the American Hospital Association, isn’t surprised. When insurers and hospitals are not on opposite sides, she said, care delivery can be smoother. “There’s more flexibility to manage premium dollars to cover services that maybe wouldn’t otherwise be covered,” Smith said.

But Tsai warns seniors that hospital-owned Medicare Advantage plans operate under the same rules as those run by commercial health insurance companies. He said patients should consider whether the extra benefits of Advantage plans “are worth the trade-off of potentially narrow provider networks and more utilization management than they would get from traditional Medicare.”

In Texas, Neary hopes the closer relationship between his doctors and his insurance plan means there’s less of a chance that bills for his medical care will be kicked back.

“I don’t think I would run into a situation where they would not provide coverage if one of their own doctors recommended something,” he said.

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Martha Santana-Chin, the daughter of Mexican immigrants, grew up on Medi-Cal, California’s version of Medicaid, the government-run health care program for people with low incomes and disabilities. Today, she is CEO of L.A. Care, which runs by far the biggest Medi-Cal health plan, with more than 2.2 million enrollees, exceeding the Medicaid and Children’s Health Insurance Program enrollments in 41 states.

“If it weren’t for safety nets like the Medi-Cal program, I think, many people would be stuck in poverty without an ability to get out,” she said. “For me personally, not having to worry about health care allowed me to really focus on what I needed to focus on, which was my education.”

As she begins her second year steering L.A. Care, Santana-Chin is grappling with federal and state spending cuts that complicate her task of providing health care to the poor and medically vulnerable enrollees in Medicaid. The insurer also provides Affordable Care Act marketplace plans through Covered California.

Santana-Chin warns that the GOP’s One Big Beautiful Bill Act, enacted last year and also known as HR 1, could result in 650,000 enrollees falling off L.A. Care’s Medi-Cal rolls by the end of 2028. This will strain the plan’s finances as revenues decline. The insurer had revenues of $11.7 billion in the last fiscal year.

HR 1 is expected to cut more than $900 billion from Medicaid over the next 10 years — including $30 billion or more in California, according to the Department of Health Care Services, which runs Medi-Cal.

Like other states facing big deficits, California has reduced its Medicaid spending through such steps as freezing new enrollments for immigrants without legal status and reintroducing an asset limit. And that’s before the state reckons with the spending cuts that likely will be required by the withdrawal of so many federal dollars under HR 1.

Santana-Chin oversaw Medi-Cal and Medicare operations for the for-profit insurer Health Net before taking the helm of L.A. Care in January 2025, nearly three years after state regulators fined L.A. Care $55 million over violations they said compromised the health and safety of its members. L.A. Care paid $27 million in penalties to the state and agreed to contribute $28 million to community health projects.

In a wide-ranging interview, Santana-Chin talked to KFF Health News senior correspondent Bernard J. Wolfson about the financial headwinds facing L.A. Care and why she believes health care shouldn’t be restricted based on a person’s immigration status. This interview has been edited for length and clarity.

Q: You grew up on Medicaid. How has that shaped your views now that you run one of the largest Medicaid plans in the country?

What really motivates me is knowing that many of the people that we’re serving are just like my family. They’ve struggled and have had to have their own children translate things that were very difficult to translate. I remember doing that for my own mother. You know, basic human dignity requires that you have access to health care.

Q: Has anything you’ve dealt with at Health Net or L.A. Care reminded you of your childhood experiences in Medi-Cal?

Back then they didn’t cover transportation, and we didn’t have a vehicle. Today, one of the issues we’ll hear from our members is the need to make sure we have trustworthy transportation that shows up on time, where the drivers treat them with respect. Had I had that, had my mother had that, life would have been much easier.

Q: What do you think the impact of HR 1 will be?

It’s going to devastate the delivery system. The state obviously isn’t going to be able to make up for the shortfalls in federal funding, and over the course of the next several years, funding is going to be less and less, and the people we cover are going to decrease significantly. We are expecting between now and the end of 2028 that we’re going to see 650,000 people drop off the rolls. That’s just L.A. Care.

Q: That’s over a quarter of your Medi-Cal enrollment.

Yes, it’s very, very significant. The reductions in payment and the rise in uncompensated care are really going to impact our delivery system. As the delivery system gets destabilized and hospitals and other health care providers are forced to close services or reduce the number of sites they have, it’s going to impact access. And it’s not only going to impact those that lose coverage.

Q: How will L.A. Care respond?

Obviously, we’re going to see a significant drop in revenue. We’re very focused on making sure that we are operating as efficiently as we can operate. And we are looking at creative ways to use technology to empower our people to do higher-level work. Mostly supporting our call center agents with smarter technology that helps them answer questions and resolve problems more quickly. Some of it is automating processes on the claims payment side.

Q: What do you have to say to congressional Republicans who passed HR 1?

We are at a point of inflection in the health care delivery system. And we have to recognize that some of the components of HR 1 will have long-term unintended consequences — maybe they were intended; I’ve got to believe that some of these things are not. There’s probably a need to reconsider some of the things that were passed.

Q: Such as?

Work requirements are an example of something that many people did believe was the right thing to do to be good stewards of the health care dollar. It is very complex and is going to cause people to lose coverage that actually do qualify. It’s unfortunate, and that would be something that I would urge folks to reconsider.

Q: What impact do you expect from California’s decision to freeze Medi-Cal enrollment for immigrants without legal status?

It doesn’t matter what immigration status you are. If you are a human being and you need health care, you’re going to try to access health care wherever you can. That’s going to put a strain on the delivery system if you’re uninsured.

Q: What has L.A. Care done to address the state’s concerns in 2022 that it delayed authorizing care and addressing patient grievances?

There has been quite a bit of investment in the L.A. Care infrastructure over the last several years — our IT platforms, our data. There’s also quite a bit of investment in adding new capacity, adding bandwidth to many of the teams, more folks to help support the work.

Q: How have federal immigration raids in L.A. affected L.A. Care members and the broader community?

It absolutely has had a chilling effect. Families are afraid to come in. They’re not taking their children to get vaccinated. I’ve had numerous providers in emergency departments say that they have experienced a drop in the volume of individuals coming in. One of our case managers was really distraught because there was an individual that decided to forgo serious lifesaving treatment because of fear.

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But there are strings attached.

In late December, President Donald Trump’s administration announced how much all 50 states would get under its new Rural Health Transformation Program, assigning them to use the money to fix systemic problems that leave rural Americans without access to good health care. Now, the clock is ticking.

Within eight months, states must submit revised budgets, begin spending, and show the money is going to good use. Federal officials will begin reviewing state progress in late summer and announce 2027 funding levels by the end of October.

The money — divided into unique allocations for each state, ranging from $147 million for New Jersey to $281 million for Texas — represents the first $10 billion installment from the five-year, $50 billion program. Congress created the fund as a last-minute sweetener in Trump’s One Big Beautiful Bill Act last summer to offset the outsize fallout anticipated in rural communities from the statute’s nearly $1 trillion in Medicaid spending cuts over the next decade.

Federal officials crafted the fund to give states “space to be creative,” Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services, said on a call with reporters after announcing the funding Dec. 29. “Some states will fail, and we will learn from that.”

The money was divided according to a complicated formula.

In 2026, each state will receive an equal $100 million share under the law for the first half of the money, plus additional funding from the second half. Oz’s staff steered payouts from the second portion based on each state’s rural score, as well as results from a “technical” scoring system for project proposals.

Within hours of the announcement, academics and researchers began to parse the awards to better understand why some states received more than others, including whether the awards reflected any partisanship or political favoritism.

At first glance, total awards do not appear to favor states governed by either Republicans or Democrats. But one academic data analysis teased out the amount awarded for each state’s technical score, which is the part determined by the discretion of agency officials.

The analysis was performed at the University of North Carolina’s Cecil G. Sheps Center for Health Services Research, which specializes in rural health. A KFF Health News review of the Sheps Center data found that states with Republican governors tended to receive more money for the parts of their application based on the technical score. Democratic-controlled states crowded the bottom quarter of those technical score awards.

Overall, though, the state awards reveal wild variation in how much money each state will get per rural resident, almost a hundredfold difference between the top and bottom.

In an emailed statement to The Arizona Republic, a spokesperson for Arizona’s Democratic Gov. Katie Hobbs accused the administration of shortchanging rural residents in the state, which was awarded $167 million this year from the program.

CMS spokesperson Chris Krepich said in an emailed statement to KFF Health News that “politics played no role in funding decisions.”

On the December call, Oz pushed states to start working on policy actions championed by the administration — such as approving presidential fitness tests and restricting food benefits — that could require legislative approval.

Half of states promised to mandate the presidential fitness test, Oz said. Many states also proposed food waivers under the Supplemental Nutrition Assistance Program, known as SNAP, which would limit low-nutrition items such as soda. He also said some states promised to teach health care professionals about nutrition. And others confirmed they will repeal certificate-of-need laws, which require companies to prove that new health facilities they want to open are necessary.

Krepich said CMS’ new Office of Rural Health Transformation is hiring program officers to serve as point people for three or four states. Many states are setting up their own offices to oversee the new funding.

Oz highlighted Alabama’s “big maternity initiative with robotics doing ultrasounds” and said states are tackling issues ranging from behavioral health to obesity.

A KFF Health News review of state “project abstracts” and “spotlights” released by CMS shows that many states plan to address the workforce challenges in rural areas. Delaware, for example, plans to use its funding to create the state’s first four-year medical school with a rural primary care track.

A third of states said they want to improve electronic health records, and every state mentioned telehealth.

Many state legislatures must pass laws to distribute the funding to their state offices. Meanwhile, state officials are hiring staff, organizing advisory committees, and preparing to dole out money.

“I’m excited about what’s next,” said Terry Scoggin, former interim chief executive of the Texas Organization of Rural & Community Hospitals, or TORCH. Texas was awarded the biggest allocation. The money will bolster a rural hospital funding bill Republican Texas Gov. Greg Abbott signed last year, Scoggin said.

More than two dozen cash-strapped rural hospitals in Texas have closed or been converted to clinics since 2005, a nationwide trend that hit the Lone Star State particularly hard. The state has the largest rural population in the United States. Texas’ allocation amounts to about $66 per rural resident, according to a KFF policy analysis. By contrast, Rhode Island was granted about $6,300 per rural resident.

Scoggin said he has “a ton of concerns” about companies taking the money instead of it helping rural hospitals and residents. “I was blown away about how many for-profit companies reached out.” The companies have also called rural hospitals and asked to work with them to apply for state money, he said.

The awards should be judged on how they benefit rural residents because “the stated goal of the program is to improve rural health,” said Paula Chatterjee, an assistant professor of medicine at the University of Pennsylvania who co-authored a Senate Finance Committee memo on the transformation fund.

Researchers at the Sheps Center conducted the analysis to estimate how much money states received from the technical score, which is the portion of funding based on the quality of their proposals and state policy actions that align with "Make America Healthy Again" priorities.

New Mexico won the least amount of technical funding, with less than 10% of its award based on the discretionary metrics. Alaska won the largest technical award, according to the Sheps Center data.

Texas, Nebraska, New Hampshire, and Hawaii rounded out the top five recipients of technical funding. In addition to New Mexico, the other lowest technical awards went to Michigan, New Jersey, Arizona, and California.

Mark Holmes, director of the Sheps Center, declined to comment on whether he saw any political bias in the awards but said the nuance in the final portion of discretionary awards based on technical scores is important because those dollars can be redistributed and potentially clawed back in future years.

“We can be fairly certain that every state will get at least a slightly, if not a vastly, different amount next year based on this re-pooling and reallocation piece,” Holmes said.

States now have a limited time to show they’re using the money effectively to secure future funding.

States have until Jan. 30 to resubmit their budgets, and CMS then has 30 days to respond, according to the standard Notice of Award. Under that timing, some states may not have cash in hand until March.

“CMS is working closely with states to complete this process as efficiently as possible,” Krepich said.

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Scattered visits to free clinics notwithstanding, Guevara hadn’t had a full medical checkup in years. She required dental work. She wanted to start looking for a job. And she was overwhelmed by the maze of paperwork needed simply to get her off the street, much less to make any of the other things happen.

But Guevara had help. The Jamboree Housing Corp., an affordable-housing nonprofit that renovated the former Stanton, California, hotel Guevara now calls home, didn’t just move her in — it also provided her a fleet of wraparound services. Jamboree counselors helped Guevara navigate the health care system to see a doctor and a dentist, buy a few things for her apartment, and get training to become a caregiver.

“I was years on the street before I got the kind of help I needed so I could help myself,” said Guevara, 68.

Amid the Trump administration’s apparent opposition to using Medicaid funding for such social services, staffers at Jamboree and similar affordable housing providers in California have been worried about losing federal money, particularly as the experimental waivers that provide the primary funding for the program they rely on expire at the end of 2026. But as it turns out, the state had the foresight several years ago to designate certain nonhousing social services, such as mental health care, drug counseling, and job training, as a form of Medicaid spending that will continue to be reimbursed.

Catherine Howden, a spokesperson for the federal Centers for Medicare & Medicaid Services, confirmed that California’s use of the “in lieu of services” classification for these wraparound programs is allowed under federal regulations.

“It is starting to sound positive that we will, at the very least, be able to continue billing for these services after the waiver period,” said Natalie Reider, a senior vice president at Jamboree Housing.

During President Donald Trump’s first term, states were permitted to use Medicaid money for social support services not typically covered by health insurance. But the second Trump administration is reeling that policy back in, saying that the intervening Biden administration took the supportive services process too far. Howden said in a statement that the policy “distracted the Medicaid program from its core mission: providing excellent health outcomes for vulnerable Americans.”

Through CalAIM, a five-year experimental build-out of the Medicaid system, programs like Jamboree were able to leverage federal funding to offer the kinds of nonhousing social services that experts contend are essential to keeping people permanently housed.

However, these wraparound services are only one component of the CalAIM initiative, which is attempting to take Medicaid, known as Medi-Cal in California, in a more holistic direction across all areas of care. And when CalAIM launched, California officials gave the programs the Medicaid “in lieu of services” designation, known as ILOS, effectively putting them outside the waiver process and ensuring that even when CalAIM sunsets, money for those social initiatives will continue to flow.

“California has tried to future-proof many of the policy changes it has made in Medi-Cal by including them in mechanisms like ILOS that do not require federal waiver approval,” said Larry Levitt, executive vice president for health policy at KFF, a health information nonprofit that includes KFF Health News. “That allows these policy changes to continue, even with a politically hostile federal administration.”

The designation allows these social services to be funded through Medicaid managed-care plans under existing federal laws because they are cost-effective substitutes for a Medicaid service or reduce the likelihood of patients needing other Medicaid-covered health care services, said Glenn Tsang, policy adviser for homelessness and housing at the state’s Department of Health Care Services. The state could not provide an estimate of the annual funding for these wraparound services because they are not distinguished from other payments made to Medicaid managed-care plans.

“We are full steam ahead with these services,” Tsang said, “and they are authorized.”

Although California was the first state to incorporate the designation for such housing and other health-related social support, Tsang said, several other states — including Arizona, Arkansas, Florida, New York, and North Carolina — are now using the mechanism in a similar fashion.

Early results suggest such support saves on health care spending. When Jamboree, MidPen Housing Corp. in Northern California, RH Community Builders in the Central Valley, and other permanent supportive housing providers employ a holistic approach that includes social services, they have reported higher rates of formerly homeless people remaining in housing, less frequent use of costly emergency health services, and more residents landing jobs that help them pay rent and stay housed.

At the nonprofit MidPen Housing, which serves 12 counties in and around the San Francisco Bay Area, roughly 40% of the units in the program’s pipeline are earmarked for “extremely low-income” people, a group that includes the homeless, said Danielle McCluskey, senior director of resident services.

CalAIM reimbursements help fund the part of MidPen that focuses on supportive services across a wide range of experiences, from chronic homelessness to mental health issues to those leaving the foster care system. McCluskey described it as one leg of a three-legged stool, the others being real estate development and property management.

“If any of those legs are not getting what they need, if they’re not funded or not staffed or resourced, then that stool is kind of wobbly — off-kilter,” the director said.

A recent state evaluation found that people who used at least one of the housing support services — including navigation into new housing, health care assistance, and a deposit to secure an apartment — saw a 13% reduction in emergency department visits and a 24% reduction in inpatient admissions in the six months that followed.

Documenting those outcomes is critical because the department needs to show federal officials that the services lessen the need for other, often costlier Medicaid-covered care — the essence of the classification.

Advocates for the inclusion of supportive services argue that the American system ultimately saves money on those investments. As California’s homeless population has soared in recent years to more than 187,000 on a given night — nearly a quarter of the U.S. total — Jamboree has been allocating more of its resources to permanent supportive housing.

Founded in 1990 in Orange County, Jamboree builds various types of affordable housing using federal, state, and private funding. Reider said about a fifth of the organization’s portfolio is dedicated to permanent supportive housing.

“They’re not going back out to the streets. They’re not going to jail. They’re not going to the hospitals,” Reider said. “Keeping people housed is the No. 1 outcome, and it is the cost-saver, right? We’re using Medicaid dollars, but we’re saving the system money in the long run.”

Guevara, who wound up on the streets after a falling-out with family in 2015, spent years living out of her truck before a shelter worker connected her with Jamboree. There, she was paired with a specialist to help her figure out how to get and see a doctor, and to keep up with scheduling the battery of medical tests she needed after years spent living in temporary shelters.

“I also got a job developer, who helped me get this job with the county so I can pay my rent,” Guevara said of her position as a part-time in-home caregiver. “Now I take care of people kind of the same way people have been taking care of me.”

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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