State-Funded Health Insurance Expansion for Noncitizen Immigrants and Hospital Uncompensated Care

Undocumented and many noncitizen immigrants are largely excluded from federally funded health insurance programs, creating substantial gaps in health coverage and financial strain on safety-net hospitals that disproportionately serve these populations through uncompensated care. Several states have implemented state-funded health coverage expansions for immigrants, but the financial implications of these policies remain poorly understood.

To examine whether Health Benefits for Immigrant Seniors (HBIS) and Health Benefits for Immigrant Adults (HBIA) programs in Illinois were associated with changes in hospitals' charity care and bad debt.

This cohort study of nonfederal general medical and surgical hospitals from January 1, 2017, to December 31, 2023, used Healthcare Cost Report Information System data. Difference-in-differences regression compared hospital financial outcomes in Illinois with hospitals in comparison states. Difference-in-differences-in-differences models examined variation by county share of immigrant populations. Analysis was performed from October 1, 2024, to June 12, 2026.

Illinois HBIA and HBIS programs.

Hospital-reported bad debt and charity care.

The study included 161 hospitals in Illinois and 1902 hospitals in comparison states. Illinois hospitals were located in counties with a higher share of Hispanic population (mean [SD], 11.4% [10.1%] vs 9.1% [10.6%]; standardized mean difference [SMD], 0.23) and higher median income ($58 121 [range, $34 982-$100 325] vs $56 102 [range, $23 968-$134 050]; SMD, 0.17), but a lower share of uninsured population (mean [SD], 7.8% [2.0%] vs 9.1% [3.5%]; SMD, -0.68). Illinois (treatment) and control hospitals were largely comparable on hospital-level attributes. In adjusted difference-in-differences models, the HBIA and HBIS programs were associated with declines in bad debt (-0.08 [95% CI, -0.11 to -0.04), adjusted bad debt (-0.13 [95% CI, -0.17 to -0.09), charity care (-0.19 [95% CI, -0.26 to -0.13), and adjusted charity care (-0.19 [95% CI, -0.27 to -0.12). Results were robust in entropy-balanced models, which showed reductions for adjusted bad debt (-0.14 [95% CI, -0.20 to -0.09]) and adjusted charity care (-0.15 [95% CI, -0.23 to -0.07). Estimated reductions in charity care were more sensitive to potential violations of the parallel trends assumption than reductions in bad debt.

In this cohort study of hospitals in Illinois and comparison states, the HBIA and HBIS programs were associated with significant reductions in hospital bad debt and suggestive reductions in charity care. State-funded health insurance expansions for undocumented and noncitizen immigrants were associated with improved hospital financial stability and may help address persistent gaps in insurance coverage among immigrants.