The Silent Strain: How Open Border Policies Have Deepened America’s Healthcare and Medicaid Crisis

Congress has been locked in endless partisan bickering over immigration, medicaid, and federal spending. While Republicans and Democrats clash, the real damage is happening in hospital emergency rooms and Medicaid budgets across the country. The political noise drowns out the human and financial fallout that already is crushing parts of our healthcare system.

Billions Redirected Every Year

Every year, between $5–15 billion is spent on emergency and non-emergency healthcare for undocumented immigrants. Much of that burden ultimately is shifted onto Medicaid, uncompensated care programs, and local hospitals. Because federal law mandates that emergency care be provided regardless of the patient’s ability to pay, the costs accumulate rapidly.

Meanwhile, federal reimbursements no longer bridge the gap as they once did. Reimbursement rates are shrinking; hospitals and states must now absorb larger shortfalls when claims for care don’t fully match costs.

How Medicaid and Hospital Budgets Get Strained

Medicaid and safety-net hospitals were always designed to absorb a portion of uncompensated care and low reimbursements — but only up to a point. In recent years, that buffer has eroded.

1. Hospital budgets are stretched to the breaking point
   A recent American Hospital Association (AHA) report found that in 2023, hospitals absorbed $130 billion in underpayments from Medicare and Medicaid alone. American Hospital Association
   In other words, for many services, hospitals are receiving far less than the cost of delivering care.
   In 2019, hospitals reported $75.8 billion in underpayments: they received only 87 cents per dollar spent on Medicare patients and about 90 cents per dollar on Medicaid patients. American Hospital Association
2. The scale of uncompensated care is massive
   Hospitals routinely absorb significant costs for patients who can’t or won’t pay. From 2015–2017, uncompensated care for uninsured Americans averaged $42.4 billion per year. KFF
   Since 2000, hospitals have provided nearly $745 billion in care that was never paid for. American Hospital Association
   In fiscal year 2021, Medicaid made $18.9 billion in “disproportionate share” (DSH) payments to hospitals to help offset these uncompensated care costs. MACPAC
3. Rural and safety-net hospitals are especially vulnerable
   Rural hospitals often operate on razor-thin margins. A U.S. Government Accountability Office (GAO) review of rural hospital closures found that many closed after years of negative operating margins that made it impossible to cover fixed costs like buildings, staff, and supplies. Government Accountability Office

• Rural hospitals tend to carry higher shares of uncompensated care compared to urban facilities. In one 2019 study, rural hospitals had a median uncompensated care share of 3.81%, versus 3.12% for urban hospitals. PMC
• In places where Medicaid was not expanded, uncompensated care burdens were even worse. PMC+1
• When rural hospitals close, communities lose access to emergency rooms, maternity wards, and basic inpatient care, aggravating health inequities. KFF+1

4. Real-world hospital failures underscore the crisis

• Madera Community Hospital in California — a rural facility — shut its doors in 2023 and filed for bankruptcy. It was the only hospital in a 30-mile radius. Wikipedia
• Southern Inyo Healthcare District (in rural California) is now on the brink of collapse, citing mounting costs and projected Medicaid revenue cuts. CalMatters
• Mount Sinai Beth Israel in New York announced in 2023 that it would close, citing losses of $1 billion over the prior decade and drastically reduced utilization. Wikipedia
• In California, hospital systems are merging and reconfiguring service lines because of financial stress. CT Insider
• Steward Health Care, once one of the largest for-profit hospital networks in the U.S., has faced bankruptcy and is divesting multiple facilities, citing untenable debt loads and thinning margins. Reuters

These stories aren’t outliers — they are signals of a systemic collapse brewing across the hospital industry.

The 2025 Tax Bill: A Big Step Forward But Still Insufficient

In 2025, Congress allocated $50 billion under a tax/appropriation bill to bolster Medicaid shortfalls and support hospitals.

This infusion of funds is historic — but it still does not plug the holes in a system already drowning.

After factoring in care provided to undocumented immigrants, the hospital system is are projected to operate $137 billion in the red over the coming years under current trends (staffing inflation, supply chain pressures, chronic underpayment).

The $50 billion then seems like a down payment — not a solution.

So, the billions more in uncompensated care for non-citizens cause the scale to become unmanageable.

Hospitals are being asked to absorb too much, indefinitely.

Doing the Right Thing Without Misusing Funds

Physicians and hospitals do the right thing in emergency situations — they don’t ask about immigration status before providing care. That’s a moral and legal imperative. But once the crisis is stabilized, reimbursement protocols must distinguish who is eligible for Medicaid vs. who is not — so that taxpayer-funded programs don’t get overwhelmed. It helps capture good data which then leads to better policies.

If Congress insists that emergency care be universal, then funding must be structured to account for it.

Blanket policies that force Medicaid or state programs to absorb costs without accountability jeopardize the safety net for citizens.

The Real Cost of Open Border Policies

Supporters of more permissive border policies often frame the issue around compassion and human rights. But without accounting for resource constraints, the rhetoric misses a harsh reality: every system has limits. When you force more demand onto already fragile systems, the quality suffers for everyone.

Hospitals shut down, ER wait times skyrocket, and Medicaid-eligible Americans see benefits cut or delayed.

This is not an abstract policy debate — these are real consequences.

If the federal government wants to extend care to undocumented immigrants, it must fund it separately, transparently, and sustainably.

Using Medicaid and local hospital budgets as catch-all funding is unfair to both taxpayers and American patients.

Conclusion: Someone Always Pays

The current trajectory — overburdened hospitals, rising uncompensated care, shrinking reimbursements, and political gridlock — is not sustainable.

The $50 billion appropriation in 2025 is welcome but insufficient. The deeper problems require structural reform: payment realignment, true cost accounting, clear delineation of who is covered by which programs, and accountability mechanisms for non-citizen care that doesn’t cannibalize domestic services.

Until those changes happen, American hospitals and Medicaid will be stuck between broken promises and broken budgets. And the ones paying the price will be everyday citizens, not the politicians who created the mess.

We need less political drama and more action.