KFF takes a new look at the continued impact of the Hyde Amendment, the federal ban on payment for abortion services, in the wake of the Supreme Court’s Dobbs decision. At a moment when all eyes are on states that have banned abortion, the Hyde Amendment remains a barrier to abortion care for people with low incomes in states where abortion is legal but the state restricts Medicaid coverage to the narrow exceptions allowed under Hyde.

Today, the policy limits abortion coverage in 19 states and the District of Columbia where abortion isn’t banned. The policy potentially affects 5.5 million women ages 15 to 49 who reside in those states and are covered by Medicaid.

Since 1977, the Hyde Amendment has banned the use of federal funds for abortion, allowing exceptions to pay for terminating pregnancies that endanger the life of the pregnant person or that result from rape or incest.  This policy has limited abortion coverage for millions of pregnant people on Medicaid, as well others who rely on federal programs such as Medicare, TRICARE, and the federal Employee Health Benefit Program for their coverage.

This longstanding federal funding ban has had a disproportionate effect on women with low incomes and women of color who are covered by Medicaid at higher rates and are more likely to seek abortion care because of persistent systemic barriers to care and contraceptive access. Some states choose to pay for abortions for their Medicaid enrollees in other instances but use their own state revenues, not federal funds, to cover the service.

For more information about the federal programs affected by the Hyde Amendment, the impact of the law on access to abortion services, and the potential effect if the law were to be repealed, check out the brief, “The Hyde Amendment and Coverage for Abortion Services Under Medicaid in the Post-Roe Era.”

Adult children of immigrants make up a disproportionately large share of physicians, surgeons and other health care practitioners in the U.S. — just one reflection of their comparatively high employment, educational attainment and income levels, according to a new KFF analysis.

The analysis of 2023 Current Population Survey data shows that U.S.-born nonelderly adults whose parents were both born outside the U.S. comprise 13% of physicians, surgeons, and other health care practitioners. That amounts to more than twice their share of the working age population (6%). 

The data show that the adult children of immigrants have higher educational attainment compared to their peers with U.S.-born parents. Forty-five percent of nonelderly adult children of immigrants hold a bachelor’s degree or higher, compared to 40% of adults with at least one U.S.-born parent. 

Adult children of immigrants also are somewhat more likely to have higher incomes, with 39% living in households with an annual income of $90,000 or more. In comparison, about one in three (36%) of nonelderly adults with at least one U.S.-born parent live in higher income households.Other key findings include: 

• Three in four (76%) nonelderly adult children of immigrants are employed, accounting for 6% of the nonelderly adult workforce, similar to their share of the nonelderly adult population (6%). The rate is higher among adult children of immigrants between the ages of 25 and 64, who are less likely to be students, with 81% of this group working compared to 78% of their peers with at least one U.S.-born parent. 
•  Nonelderly adult children of immigrants are less likely than those with U.S.-born parents to have private health coverage (67% vs. 76%) and more likely to be uninsured (13% vs. 8%). Their higher uninsured rate may reflect that they are more likely to be working in some industries like construction, food services, and transportation, which may be less likely to offer health coverage.

The full analysis, “The Role of Adult Children of Immigrants in the U.S. Health Care Workforce”, is available at kff.org.

Introduction

Immigrants and their children form a growing share of the U.S. population and make important contributions to the country’s culture, economy, and workforce. One of the major reasons why immigrants come to the U.S. is for improved educational and employment opportunities for their children. Many children of immigrants realize their parents’ dreams by attaining high levels of education and jobs that allow for an improved quality of life. Adult children of immigrants also play an important role in supporting the U.S. workforce and economy, particularly in certain sectors, including health care. This brief examines key characteristics of nonelderly adult children of immigrants and their role in the workforce, including the health care workforce, based on KFF analysis of 2023 Current Population Survey data (see Methods for details). All differences described in the text are statistically significant at p<0.05. Key takeaways include the following:

• Nonelderly adult children of immigrants are more likely than those with U.S.-born parents to be under age 35 and to be Hispanic or Asian. Six in ten (62%) nonelderly adult children of immigrants are under age 35 and three-quarters are Hispanic (55%) or Asian (22%). In comparison, about four in ten (37%) of nonelderly adults with at least one U.S.-born parent are under 35 years and one in ten is Hispanic (9%) or Asian (1%). About three in ten (28%) nonelderly adults who are immigrants themselves are under 35 years and three-quarters are Hispanic (49%) or Asian (25%).
• Nonelderly adult children of immigrants have somewhat higher educational attainment compared to their peers with U.S.-born parents and immigrant adults. Among those ages 25 to 64 (who are less likely to be students), over four in ten (45%) adult children of immigrants have a bachelor’s degree or higher compared with 40% of those with at least one U.S.-born parent and 38% of immigrant adults.
• About three-quarters (76%) of nonelderly adult children of immigrants and nonelderly adult immigrants (75%) are working and they make outsized contributions to the health care workforce. In particular, adult children of immigrants make up twice the share of physicians, surgeons, and other health care practitioners compared with their share of the population (13% vs. 6%). Immigrant adults also make up a larger share of physicians, surgeons, and other health care practitioners than they do of the population (23% vs. 19%) and play a particularly large role as direct care workers in long-term care settings, accounting for almost three in ten (28%) of these workers. In contrast, nonelderly adults with at least one U.S.-born parent make up a smaller share of physicians, surgeons, and other health care practitioners as well direct care workers in long-term care relative to their share of the population.
• Four in ten (39%) nonelderly adult children of immigrants live in households with an annual income of $90,000 or more and most (67%) have private health coverage. Similarly, about one in three (36%) of nonelderly adults with at least one U.S.-born parent and a quarter (25%) of nonelderly adult immigrants have annual household incomes of $90,000 or more. However, adult children of immigrants are less likely than adult children of U.S.-born parents to have private health coverage (67% vs. 76%) and more likely to be uninsured (13% vs. 8%), although they are more likely than immigrant adults to have coverage. Their higher uninsured rates relative to their peers with at least one U.S.-born parent may reflect that they are more likely to be employed in construction, food services, or transportation occupations, which may be less likely to offer employer-sponsored coverage.

These data suggest that proposals to limit workforce participation of immigrants or to end birthright citizenship for the children of some immigrants may adversely impact the U.S. workforce and economy. A reduction in the population of first- and second-generation immigrants may increase workforce shortages. The current health care workforce shortage in particular, which is projected to continue across professions, including allied health, long-term support services, behavioral health, and specialty physicians, may be exacerbated by such limitations given the disproportionate roles of both adult children of immigrants as well as immigrant adults in various health care occupations and industries. Worsening shortages could have negative effects on the nation’s health and well-being as well as the economy.

Background

In addition to the 45.5 million immigrants residing in the U.S. as of 2023, there are over 25.6 million U.S.-born individuals residing in the country who have immigrant parents (both parents born outside the U.S.), half of whom are nonelderly adults ages 19 to 64.¹  Immigrants and their adult children make up a growing share of the population and play an important role in the nation’s communities, workforce, and economy. Other research has shown that adult children of immigrants have higher levels of educational attainment and work in higher-earning professions than their parents. Analysis further shows that children of immigrants contribute more in taxes on average than their parents or the rest of the U.S.-born population, and their fiscal contributions exceed their costs associated with health care, education, and other social services. Moreover, as older generations exit the workforce, immigrants and their U.S.-born children have been the primary drivers of workforce growth, accounting for 83% of the growth in the U.S. labor force between 2010 and 2018.

At the same time, immigration remains a hot-button political issue in the U.S. and there is pervasive anti-immigrant rhetoric. A few states, like Florida, recently passed laws that seek to limit immigrants’ ability to participate in the workforce, and, at the national level, presidential candidates have made recent proposals to end or limit birthright citizenship, a right guaranteed under the 14^th amendment of the U.S. Constitution for children born in the U.S. regardless of their parents’ immigration status. Such proposals, which are intended to deter immigration, would not only impact immigrants’ and their children’s access to health care but could have broader ramifications for the nation’s workforce and economy, potentially exacerbating existing worker shortages, including in health care.

This brief analyzes data from the 2023 Current Population Survey Annual Social and Economic Supplement (CPS-ASEC) to present demographic, employment, and socioeconomic characteristics of nonelderly adults 19 to 64 years born in the U.S. to immigrant parents (“adult children of immigrant parents”) (defined as having both parents born outside the U.S) and how they compare to “adult children of U.S.-born parents” (defined as having at least one parent born in the U.S.) and immigrant adults (see Methods for more details).

Demographic Characteristics

Adult children of immigrants are more likely to be younger (under 35 years) and more likely to be Hispanic or Asian than adult children of U.S.-born parents. Six in ten (62%) adult children of immigrants are between 19 and 34 years compared to 37% with at least one U.S.-born parent and 28% of immigrant adults (Figure 1). In addition, almost three-quarters of adult children of immigrants (77%) and immigrant adults (74%) are Hispanic or Asian compared to one in ten (10%) with at least one U.S.-born parent (Figure 2).

Adult children of immigrants have somewhat higher educational attainment levels compared to their peers with U.S.-born parents and immigrant adults. Among those between the ages of 25 and 64 years (who are more likely to have completed school), over four in ten (45%) of adult children of immigrants have a bachelor’s degree or higher compared with 40% of those with at least one U.S.-born parent and 38% of immigrant adults (Figure 3).

Employment Characteristics

Three in four (76%), or nearly 8.7 million adult children of immigrants are employed, accounting for 6% of the nonelderly adult workforce, which is similar to their share of the nonelderly adult population (6%). Immigrants make up about one in five of the nonelderly adult workforce and population, while the remaining three-quarters of the nonelderly workforce and population are comprised of adults with at least one U.S.-born parent.

Employment rates for adult children of immigrants are similar to their counterparts with at least one U.S.-born parent and immigrant adults with roughly three in four employed, although among those ages 25 to 64, they are higher for adult children of immigrants. Among nonelderly adults between ages 25 to 64 (who are less likely to be students), about eight in ten (81%) adult children of immigrants are employed compared with 78% of their peers with at least one U.S.-born parent and 76% of immigrant adults in this age group.

The top five industries in which adult children of immigrants are employed include health care and social assistance; retail trade; educational services; professional, scientific, and technical;  and construction industries (Figure 5). Industry patterns for adult children of immigrants and their counterparts with U.S.-born parents are largely similar, with significant shares working in health care and social assistance (15% and 14%), retail trade (12% and 11%), professional, scientific, and technical industries (9% and 8%), educational services (9% and 10%), and in construction (7% for both). While significant shares of immigrant adults also are employed in health care and social assistance (12%) and professional, scientific, and technical industries (9%), their rates are lower, and over one in ten work in construction (11%). Significant shares of immigrant adults also are employed in food service (8%) and transportation (7%) industries.

Role in the Health Care Workforce

Adult children of immigrants and immigrant adults account for larger shares of physicians, surgeons, and other practitioners relative to their share of the nonelderly population. Specifically, adult children of immigrants make-up 13% of physicians, surgeons, and other practitioners, over twice their share of the nonelderly population (6%), and immigrant adults account for about a quarter (23%) of people in these occupations compared with 19% of the nonelderly population (Figure 6). (See Methods for details on health care occupation groupings.) Immigrant adults also play a particularly large role in the long-term care (LTC) workforce, making up almost three in ten (28%) of direct care workers in LTC settings, including registered nurses, licensed practical nurses, certified nursing assistants, home health aides, and personal care aides working in nursing homes, residential care facilities, or home health services. Reflecting this role, research has found that increased immigration is associated with improved staffing levels at U.S. nursing homes and consequently leads to improved outcomes for patients. On the other hand, adult children of at least one U.S.-born parent make up a smaller share of physicians, surgeons, and other practitioners as well as direct care workers in LTC than they do of the population (64% and 66% vs. 75%).

Income and Health Coverage

Adult children of immigrants attain greater upward mobility than their parents and have somewhat higher household incomes than immigrant adults as well as adult children of U.S.-born parents. Reflecting their higher rates of educational attainment and employment patterns, four in ten (39%) nonelderly adult children of immigrants live in households with an annual income of $90,000 or more compared with about one in three (36%) nonelderly adult children of U.S.-born parents and a quarter (25%) of nonelderly adult immigrants (Figure 7).

Most adult children of immigrants and immigrant adults have private health coverage, but they are more likely than adult children of U.S.-born parents to be uninsured (Figure 8). Despite high rates of employment and higher incomes, adult children of immigrants are less likely than adult children of U.S.-born parents to have private health coverage (67% vs. 76%) and are more likely to have Medicaid or other public coverage (20% vs. 16%) or to be uninsured (13% vs. 8%). However, they are more likely than immigrant adults to have private coverage (67% vs. 58%) and less likely to be uninsured (13% vs. 23%). While many adult children of immigrants work in health care and other professional occupations, they are more likely than those with at least one U.S. born parent to be in construction, food services, or transportation occupations, which may be less likely to offer employer-sponsored coverage. The higher uninsured rates among immigrant adults also reflect eligibility restrictions for federally funded coverage options, including Medicaid. Given their higher uninsured rates, immigrants and adult children of immigrants likely face increased barriers to accessing care and are at increased financial risk for health care costs.

1. KFF analysis of 2023 Current Population Survey Annual Social and Economic Supplement (CPS-ASEC). ↩︎

President Biden released his FY 2025 budget request on March 11, 2024. The President’s fourth and final budget request of his first term builds on past efforts to address the domestic HIV response, including by proposing slight funding increases for the “Ending the HIV Epidemic” (EHE) initiative and the Housing Opportunities for People with AIDS (HOPWA) Program. In addition, this is the third year the budget proposes a new mandatory HIV prevention program aimed at expanding the use of pre-exposure prophylaxis (PrEP), a medication that prevents HIV for those at higher risk.

The request also includes discretionary funding levels for key programs aimed at addressing the domestic HIV epidemic, including at the Centers for Disease Control and Prevention (CDC), the Health Resources and Services Administration’s (HRSA) Ryan White HIV/AIDS and Health Center Programs, the National Institutes of Health (NIH), the Dept. of Housing, Urban Development’s HOPWA Program, the Minority AIDS Initiative, and the Indian Health Service (IHS). It also marks the fifth year of budget requests for the EHE. (Not included here are funding levels through mandatory accounts, including Medicaid, Medicare, Social Security Insurance (SSI), and Social Security Disability Insurance (SSDI), which make up the majority of HIV spending by the federal government.)

As the FY 2024 budget has not yet been approved by Congress, comparisons are made to the FY 2023 level, when possible. An overall request total for discretionary HIV funding is not yet available as we await the domestic HIV funding level from NIH. The funding request for the EHE initiative totals $593.25 million, $20 million (3.5%) over the FY 2023 enacted level.

Key budget highlights are as follows.

CDC – HIV prevention

• The FY 2025 funding request for domestic HIV prevention at the CDC, which accounts for almost all federal funding for domestic HIV prevention, totals $1.0 billion which is the same level as the FY 2023 enacted amount.

HRSA – Ryan White and Health Center HIV Funding

• The Ryan White HIV/AIDS Program, the nation’s safety net for HIV care and treatment, receives $2.6 billion in the FY 2025 request, a $10 million (0.4%) increase over the FY 2023 enacted level. The small increase is attributed to EHE activities; the EHE receives $175 million in the request, an increase of $10 million (6.1%) over the FY 2023 enacted level.
• The FY 2025 budget request also includes $157.25 million in HIV funding for the Health Center Program at HRSA, all of which is for the EHE initiative, and is the same amount as the FY 2023 enacted level.

NIH – Domestic HIV Research

• The National Institutes of Health (NIH) carries out almost all federally funded HIV research activities. The domestic share of HIV funding is not yet known. The FY 2023 enacted level for domestic HIV research at NIH was $2.7 billion. (This line will be updated with FY 2025 request level, when possible.)
• Included in the overall HIV funding at NIH is funding for the EHE. The agency received $26 million in EHE funding in the request which is the same as the FY 2023 enacted level.

Indian Health Service (IHS)

• The FY 2024 budget request includes $15 million for EHE activities at the Indian Health Service (IHS). This is a $10 million, or 200% increase, over the FY 2023 enacted level of $5 million.

Housing Opportunities for People with AIDS (HOPWA)

• HOPWA is a program of the Department of Housing and Urban Development which provides housing assistance and supportive services to low-income people with HIV facing housing insecurity. The FY 2023 budget request includes $505 million, a $6 million (1%) increase over the FY 2023 enacted level.

PrEP Access through Medicaid and CHIP

• The budget creates a proposal which would require state Medicaid and CHIP programs to cover PrEP and associated laboratory services without cost-sharing for beneficiaries. It also “places guardrails on utilization management practices like prior authorization and step therapy.”

Mandatory PrEP Program

• For the third year in a row, the Budget proposes to repropose $9.8 billion over 10 years for a new mandatory Pre-Exposure Prophylaxis (PrEP) Delivery Program to End the HIV Epidemic in the United States (“PrEP Delivery Program”). The program would aim to “provide PrEP and associated services at no cost to uninsured and underinsured individuals and expand the number of providers serving underserved communities.”

The tables below compare federal funding levels for domestic HIV, where specified, in the FY 2025 request to the FY 2023 enacted levels. (As noted, FY24 funding levels are yet available for comparison.) Funding for the “Ending the HIV” Initiative is included in the overall table (Table 1) and in a dedicated table (Table 2). Funding for the new PrEP program is not included below as the following tables include discretionary funding only.

Key Documents:

• White House Budget Resources 
• HHS Budget Justification
• CDC Congressional Budget Justification
• HRSA Congressional Budget Justification 
• NIH Congressional Budget Justification 
• HUD Congressional Budget Justification
• IHS Congressional Budget Justification

President Biden released his FY 2025 Budget Request on March 11, 2024. Since FY 2024 appropriations have not been finalized yet, comparisons here are made to the FY 2023 enacted level. The budget request includes discretionary funding for U.S. global health programs at the State Department, the U.S. Agency for International Development (USAID), the Centers for Disease Control and Prevention (CDC), and the National Institutes of Health (NIH).[i] Highlights include:

• Total funding would decline: Funding provided to the State Department and USAID through the Global Health Programs (GHP) account, which represents the bulk of global health assistance, totals $9.8 billion in FY 2025, a decrease of $733 million below the FY 2023 enacted level.
• The entire decline is due to a decreased contribution to the Global Fund (but, there are specific technical reasons for the decrease): Funding for the Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund) totals $1.2 billion, a decrease of more than $800 million compared to FY 2023 ($2 billion). This decrease is due to a funding match requirement that limits the amount the U.S. can contribute, which is a cap of 33% of total contributions from other donors; the FY 2025 Global Fund amount is expected to support the third tranche of U.S. funding as part of its three-year pledge of $4.8 billion toward the Global Fund’s seventh replenishment.
• Two areas would increase slightly:
  • Maternal and child health (MCH) programs would receive a slight increase, partly due to an increased contribution to Gavi, the Vaccine Alliance, as part of the first year of a four-year pledge towards Gavi’s next replenishment cycle.
  • Family planning and reproductive health (FP/RH)[ii], is the only other area that would receive a slight increase – for both bilateral funding and the U.S. contribution to the United Nations Population Fund (UNFPA).
• All other areas would remain flat: Funding for bilateral HIV, TB, malaria, nutrition, vulnerable children, neglected tropical diseases, global health security, and the Health Reserve Fund are the same as the FY 2023 amount.
• Also of note:
  • The FY 2025 request also includes funding for the Global Financing Facility (GFF), provided under MCH funding; the Pandemic Fund, provided under global health security funding; and the Global Health Worker Initiative, provided as its own separate line item.
  • Global health funding at CDC remains flat.

See the table below for additional detail. See other budget summaries and the KFF budget tracker for details on historical annual appropriations for global health programs.

Resources:

• White House budget resources
• State Department, FY 2025 International Affairs Budget
• Centers for Disease Control and Prevention, FY 2025 CDC Congressional Justification
• National Institutes of Health, Overview of FY 2025 President’s Budget

[i] Total funding for global health is not currently available as some funding provided through USAID, NIH, and DoD is not yet available.

[ii] Funding through the Economic Support Fund (ESF) account for FP/RH was specified by the White House Office of Management and Budget (OMB) during a conference call on the international affairs budget, per PAI.

Following implementation of Medicaid expansion under the Affordable Care Act (ACA) in North Carolina and South Dakota in 2023, there has been a recent surge in expansion activity early in 2024 among several of the ten states that have not yet adopted Medicaid expansion. While activity in Alabama, Georgia, and Kansas may have stalled, there continues to be growing potential for action in Mississippi. While expansion activity is ongoing in several states, President Biden continues to urge Congress to close the coverage gap in the remaining non-expansion states, though that is unlikely in a divided Congress. This policy watch takes a look at recent activity, what expansion could mean in Mississippi, and what to watch as things continue to play out.

What is the status of Medicaid expansion in Mississippi?

Medicaid expansion legislation (HB 1725) was recently passed in the Mississippi House by a 99-20 vote (a veto-proof majority) that directs the Division of Medicaid to seek a waiver to implement the expansion. The waiver would require individuals to be working in a job without health insurance, enrolled as a full-time student, or enrolled full-time in a workforce training program. Coverage would be delivered through managed care plans, which would provide workforce training and skills building and financial literacy materials. Individuals who have insurance through employer or private health insurance and who voluntarily disenroll from that coverage would not be eligible for Medicaid expansion coverage for 12 months. A $10 copay would be required for nonemergency use of the emergency room.

The legislation requires the Medicaid agency to submit a State Plan Amendment (SPA) to implement the expansion if the waiver is not approved by Sept. 30, 2024 or if approved and subsequently terminated. The SPA would be “substantially the same” as the waiver plan in terms of coverage group, delivery system, benefits package, and funding but would exclude the work requirement.

The bill includes financing and other provisions. The legislation stipulates that the expansion is contingent upon continuation of the current federal matching rate (FMAP) of 90%. Through waiver or SPA, the legislation calls for an assessment on hospitals and managed care plans to fund portion of the state share. The legislation would implement expansion starting January 1, 2025 and would require reauthorization to extend expansion beyond January 31, 2029.

What are the implications of Medicaid in Mississippi?

Medicaid eligibility for adults in Mississippi is very limited. In Mississippi, current eligibility limits for parents is 28% of the federal poverty level (FPL) or $7,230 annually for a family of three. There is no pathway for coverage for childless adults, so most childless adults with incomes below the poverty level have no options for affordable, comprehensive health coverage, since ACA premium subsidies are available only for people with income levels at or above poverty.

KFF estimates that 123,000 uninsured adults could be eligible for Medicaid if the state adopts the Medicaid expansion. This number includes 74,000 adults with incomes below poverty who fall into the coverage gap and an additional 49,000 uninsured adults with incomes between 100% and 138% FPL. Adults who fall into the coverage gap have incomes above current Medicaid eligibility limits, but below poverty, making them ineligible for subsidies in the ACA Marketplaces. Most uninsured adults with incomes between 100% and 138% FPL are currently eligible for Marketplace coverage but not enrolled. Most of the adults who are currently eligible for coverage in the Marketplace qualify for plans with zero premiums; however, even with no premiums, Medicaid could provide more comprehensive benefits and lower cost-sharing compared to Marketplace coverage.

What are key developments to watch?

Mississippi Medicaid expansion legislation is now under consideration in the Senate. The outcome of the legislation remains uncertain, and Senate leaders plan to introduce their own proposal so it is likely that there will be further negotiations between the two chambers. CMS under the Biden Administration is not expected to approve work requirement waivers. Unlike the House bill, the Senate proposal could include language and dates that would wait for a future presidential administration to take office and approve a waiver before expansion would be implemented. Even if a bill is passed by both legislative chambers, Governor Reeves has remained opposed to expansion.

A temporary financial incentive for states that newly adopt Medicaid expansion has made expansion more attractive for states. Under the American Rescue Plan Act states that newly adopt expansion are eligible for an additional 5 percentage point increase in the state’s traditional FMAP for two years, resulting in a temporary net fiscal benefit for these states. This fiscal incentive was key in moving expansion forward in North Carolina. KFF had estimated that Mississippi could realize a net fiscal benefit of $690 million over two years if expansion had been implemented in 2022; however, the fiscal incentive is available for two years whenever a state adopts expansion.

Provider organizations in the state, including the Mississippi State Medical Association and Mississippi Hospital Association, have been supporters of expansion. A KFF review of studies on the economic impact of Medicaid expansion on providers identified positive economic impacts for providers (particularly rural hospitals), in line with prior research.

The high cost of prescription drugs continues to be a top health care priority for the public. Policymakers from both parties at the federal and state level have been pursuing a range of options to lower drug prices for Americans, one of which would allow for the safe importation of prescription drugs from Canada. This idea is based on data showing that people in the U.S. often pay more for medications than people in other countries.

On January 5, 2024, Florida became the first state to gain authorization from the Food and Drug Administration (FDA) to import certain prescription drugs from Canada. Florida’s plan is based on an approach developed under the Trump Administration and executed under the Biden Administration, following an executive order issued by President Biden in July 2021 directing the FDA to work with states to import prescription drugs from Canada. The idea of importing prescription drugs has bipartisan support among the general public (Figure 1), although there are long-standing concerns with this approach in terms of ensuring drug safety, and the idea is opposed by the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Canadian government.

Many studies have shown that people in the United States often pay more for their prescription drugs than in other developed countries, including Canada. One analysis of a broad range of drugs found that Canadian prices are 44% of those in the United States, and according to a KFF analysis, per capita spending on prescribed medicines was 42% higher in the United States than Canada. Canada’s drug prices are generally lower than those in the United States because the Canadian government has various mechanisms to lower the cost of prescription drugs.

The Inflation Reduction Act included many provisions that affected Medicare drug prices and out-of-pocket costs, but did not address drug prices for others, which has contributed to ongoing interest in adopting strategies, such as importation, to lower drug costs for other Americans.

These FAQs address questions related to prescription drug importation, including the current status of importation proposals, details of Florida’s importation program recently authorized by the FDA, and concerns and challenges with this approach.

1. How does the U.S. currently regulate the importation of prescription drugs from other countries?

Currently, the only type of legally imported FDA-approved drugs are those that are: 1) manufactured in foreign FDA-inspected facilities, intended for use by U.S. consumers, and imported into the U.S. by the drug manufacturer, and 2) those that are U.S.-approved and manufactured in the U.S., sent abroad, then imported back into the U.S. under rare circumstances such as for emergency medical purposes or in the case of product recalls.

Drug importation as part of efforts to lower drug prices in the U.S. takes a different form. In 2000, Congress enacted the Medicine Equity and Drug Safety (MEDS) Act, which added Section 804 to the FD&C Act, to allow pharmacists and wholesalers to import prescription drugs directly from certain industrialized countries, including Canada. The MEDS Act allows such importation only if the HHS Secretary certifies that the program: “poses no additional risk to the public’s health and safety,” and “results in a significant reduction in the cost of covered products to the American consumer.” The Medicare Modernization Act of 2003 (MMA) amended Section 804 by specifying that wholesalers and pharmacists can only import prescription drugs from Canada, not other industrialized countries. The MMA also requires the HHS Secretary to issue regulations that would grant waivers to individuals to import drugs for personal use under certain circumstances.

In September 2020, the Trump Administration issued a final rule that created a new pathway, called the Section 804 Importation Program (SIP) pathway, for states and other entities to import drugs from Canada. To comply with the statutory requirements related to health and safety and cost savings, then-HHS Secretary Alex Azar certified that importation of prescription drugs poses no risk to public health and safety and would result in significant cost savings to the American consumers.

2. How did Florida gain approval to import drugs from Canada and what requirements must be met before the plan can be implemented?

In January 2024, the FDA under President Biden granted its approval to Florida’s state plan to import certain prescription drugs from Canada for a period of two years, stating that it met the requirements that importation would provide savings to consumers without sacrificing health and safety. When submitting its SIP application for approval, Florida was required to specify: the drugs it seeks to import; the foreign seller in Canada that would purchase the drug directly from its manufacturer; the importer in the U.S. that would buy the drug directly from the foreign seller in Canada; the re-labeler or re-packager of the drug itself that would ensure the drug meets all labeling requirements in the U.S.; the qualifying lab that would conduct testing of the drug for authenticity and degradation; and steps that would be taken by the SIP to ensure the supply chain is secure.

Even with FDA approval, Florida will need to meet additional requirements before the plan can be implemented. For example, before Florida is permitted to import any drugs from Canada, it will need to submit a pre-import request to the FDA for each drug it seeks to import, and it can only import that drug if the FDA approves that request. The state of Florida will also be required to conduct quality testing of the drugs and ensure that drug labels meet FDA standards.

3. Which drugs can be imported by Florida and other states under the SIP importation pathway?

Under the SIP pathway, only drugs that are currently marketed in the U.S. are eligible for importation. In addition, in order for a drug to eligible, it must also be approved by the Health Canada’s Health Products and Food Branch (HPFB) and have appropriate labeling to be marketed in Canada.

As under current law, certain types of drugs are excluded from the definition of a prescription drug eligible for importation including: controlled substances, biological products (including insulin), infused drugs, intravenously injected drugs, and inhaled drugs during surgery. Furthermore, drugs that are subject to risk evaluation and mitigation strategies (REMS), which are high-risk products with serious safety concerns, such as opioids, are not eligible for importation.

Florida seeks to initially import 14 drugs that treat HIV/AIDS, mental illness, prostate cancer, and urea cycle disorder. In Florida, imported drugs will only be available for people receiving services through certain state agencies and government programs, including people covered under Medicaid, people served through county health departments, and others residing in certain state facilities. The program does not extend to people with other types of insurance, such as employer insurance, or the uninsured.

4. What are the estimated savings associated with Florida’s drug importation plan?

According to Florida’s January 5, 2024 press release, the state’s plan will save the state up to $183 million in the first year of implementation, and based on Florida’s October 20, 2023 estimate of cost savings, these savings will accrue to the state’s Medicaid program. Whether any Floridians will pay lower out-of-pocket costs on imported drugs, or how much they are likely to save, is unclear.

Neither the September 2020 final rule that created the SIP pathway nor the FDA’s full final regulatory impact analysis provided an estimate of the expected savings. The final regulatory analysis noted that responses by other stakeholders, such as Canadian regulatory agencies and drug manufacturers, could impact the potential benefits of this program.

5. What are other states doing to implement drug importation proposals?

Many states are considering legislation that would facilitate drug importation from Canada. Several states, including Colorado, Vermont, Maine, New Mexico, New Hampshire, North Dakota, and Texas have enacted laws to establish importation programs and are actively pursuing the importation of prescription drugs from Canada.

• Colorado: In February 2024, Colorado submitted a revised version of its SIP to the FDA. In its proposal, Colorado notes that it has been having difficulty negotiating with drug manufacturers in Canada to allow exportation of their drugs to the U.S. and has been looking for more guidance from the FDA on how to address this issue. Colorado seeks to import 24 drugs to treat blood clots, cystic fibrosis, respiratory illnesses, cancer, type 2 diabetes, HIV/AIDS, psoriatic and rheumatoid arthritis. Of the drugs Colorado lists in its application, 4 overlap with those that are on Florida’s importation drug list.Colorado estimates the program will save $50.9 million in the first 3 years of implementation if all 24 eligible drugs are imported. Unlike the Florida analysis of savings, Colorado’s analysis assumes cost savings for individuals with commercial insurance, including employer-sponsored and individually purchased insurance. According to Colorado, Medicaid is not a targeted population because it “receives steep rebates for covered drugs, lower than what any importation program could provide,” and therefore, its estimates of savings do not include individuals covered by Medicaid, nor does it include Medicare or the uninsured. Colorado expects the nearly all of the savings (93.5%) will be passed onto consumers in the form of lower premiums though consumers will also see some savings in the form lower out-of-pocket expenses.

• New Mexico: New Mexico submitted its SIP application in December 2020 for FDA approval and is still awaiting a response from the FDA.
• New Hampshire: New Hampshire submitted a SIP proposal in August 2021, which was rejected by the FDA in November 2022 because the state had not identified a Foreign Seller nor provided other requested information. New Hampshire has not yet submitted a revised application.
• Vermont: Vermont submitted a concept paper in November 2019, but it has not submitted a new importation proposal following the SIP pathway being finalized in September 2020.
• Maine: Maine submitted an importation proposal in May 2020 for FDA approval, also prior to the SIP pathway being finalized, and has not submitted a new proposal.
• North Dakota: North Dakota passed a bill in April 2021 that requires a study on the potential impacts of prescription drug importation.
• Texas: In June 2023, Texas enacted legislation to establish an importation program and published a wholesale prescription drug importation report in December 2023 with research and recommendations to support implementation of the program. 

6. How does Canada view these importation programs?

When the SIP importation pathway was first proposed, the Government of Canada stated that it would be unable to meet the needs of the U.S. market without impacting access to medications for Canadians. The Canadian government also expressed concern that this policy would create drug shortages in Canada, and issued an order in November 2020 prohibiting the distribution of drugs that could cause or exacerbate a shortage. Therefore, it is possible that the Canadian government may impose barriers for importation to the U.S. Canadian law limits the sale of drugs outside of Canada that could create or worsen supply issues for Canadians. In response to the recent FDA action, Health Canada released a statement saying, “the Government of Canada is taking all necessary action to safeguard the drug supply and ensure Canadians have access to the prescription drugs they need” and added, “bulk importation will not provide an effective solution to the problem of high drug prices in the U.S.”

7. Under what circumstances can individuals legally import drugs from other countries, like Canada?

In most circumstances, it is illegal for individuals to import FDA-approved drugs from other countries for personal use. However, based on changes enacted by the MMA, personal importation of prescription drugs that have not been approved by the FDA for use in the U.S. is permitted on a case-by-case basis. Under this statutory authority, FDA has put out guidance that lays out certain circumstances where importation of non-FDA approved drugs for personal use might be allowed. For example, personal importation is generally allowed if the treatment is for a serious condition, there is no effective treatment available in the U.S., and there is no commercialization of the drug for U.S. residents. Typically, only a three-month supply is allowed, and individuals must confirm in writing that the drug is for personal use and provide information about the physician responsible for their treatment.

There appears to be little enforcement by the FDA of the ban against importing FDA-approved drugs for personal use. Even if the personal importation of a drug is technically illegal, current law directs the FDA to exercise discretion in permitting personal importation of drugs when the product is “clearly for personal use, and does not appear to present an unreasonable risk to the user,” which is reinforced in FDA guidelines.

Updated February 20, 2025, to correct the average deductible amount for standalone dental plans offered on the Marketplace in 2023.The 2023 KFF Consumer Survey of Consumer Experiences with Health Insurance finds cost barriers to adult dental care across coverage types. Conducted in February and March of 2023, the survey includes a nationally representative sample of 3,605 U.S. adults who have health insurance. This Policy Watch discusses a new proposal in the Health and Human Services (HHS) Benefit and Payment Parameters for 2025 that aims to expand access to adult dental care in Affordable Care Act (ACA) Marketplace plans.

Background

While dental coverage for children under the age of 18 is an essential health benefit (EHB) under the ACA statute, adult dental care is currently prohibited by agency regulation from being considered an EHB in individual and small group plans. As a result, it is excluded from the ACA’s major cost-sharing protections that apply to EHBs such as the ban on annual and lifetime dollar limits and maximum annual limits on out-of-pocket cost sharing for consumers and is not covered by premium subsidies. There are still coverage options for adults seeking dental care through the Marketplace, offered through stand-alone dental plans (SADPs) or embedded plans (medical plans that include dental coverage). Dental care is usually subject to a deductible, though the National Association of Dental Plans reports that many dental plans waive the deductible for preventive dental care such as cleanings or cover preventive care 100%. Dental coverage that is included in an embedded plan is generally subject to the medical deductible for the plan, which, on average, was $3,057 in 2024. This translates to greater consumer cost sharing before coverage of dental services begins. In contrast, the average deductible for standalone dental plans offered on the Marketplace in 2023 was $52 according to KFF analysis of the Health Insurance Exchange Plan Attributes Public Use Files, which includes all qualified and non-qualified stand-alone dental plans sold on- and off- the exchange.

The KFF Consumer Survey of Consumer Experiences with Health Insurance finds that consumers who reported having insurance coverage at the time of the survey tend to avoid seeking dental care if the out-of-pocket costs are high. Across coverage types, at least one in four adults with health insurance report cost barriers to accessing dental care in the past year, including about four in ten of those with Medicaid (39%) and Marketplace coverage (37%) and a quarter of those with ESI (25%) and Medicare (26%) (Figure 1).

Delaying needed dental care could lead to more serious health problems down the road. Poor dental health is associated with chronic diseases such as diabetes, heart disease, and oral cancer, and could also lead to additional burdens on the healthcare system as patients seek care elsewhere.

The HHS Benefit and Payment Parameters Notice for 2025 proposes to remove the prohibition on the classification of routine adult dental health coverage as an EHB. Under this proposed rule, states would have the option of classifying adult dental care as an EHB. If a state chose to classify adult dental health as an EHB, the state (or the federal government as a fallback) would be required to enforce the same ACA protections for adult dental coverage that apply to other EHBs. They would also have the option of applying additional protections for adult dental coverage offered as an EHB that goes beyond the federal requirements for EHBs.

What Are the Key Issues to Watch?

Embedded deductibles might not provide consumers with financial protection for dental care. One issue raised in comment letters for the 2025 Payment Notice is that consumers who receive dental care through embedded dental coverage may have to meet the medical deductible before coverage of dental services can begin. If a state chooses to offer adult dental care as an EHB, medical plans would be required to cover it, and the medical deductible could apply. Deductibles under medical plans can be thousands of dollars, which may deter consumers from seeking dental care, especially people with lower incomes.

Classifying adult dental care as an EHB could come at an increased cost to the federal government and health issuers. CMS stated in the proposed rule that it does not anticipate any immediate costs as a result of giving states the option to include adult dental care as an EHB. However, it is possible that application of advanced premium tax credits towards dental care could raise costs for the federal government. Additionally, cost sharing provisions that apply to EHBs, such as the ban on annual and lifetime coverage limits and the maximum annual out of pocket limit, could increase costs for health plan issuers since they could no longer apply these restrictions on dental care.

The new provision could affect employer-sponsored plans. Small employer plans, like those in the individual market, are required to cover EHBs. While large employer plans do not have to meet EHB rules, federal regulations require that these plans choose a state benchmark in order to comply with the ACA’s prohibition on annual and lifetime dollar limits. CMS pointed out in the proposed Payment Notice that if a self-insured or fully-insured large employer plan selects a state benchmark plan that includes adult dental care as an EHB, they would be required to abide by the cost-sharing requirements that apply to other EHBs. Employer plans that offered dental plans separately as “excepted benefits” (which are not subject to ACA requirements for comprehensive medical insurance), however, would presumably not be required to abide by these requirements.

Consumers could be subject to cost-sharing for preventive dental services. The ACA requires most private health plans to cover, without cost sharing, preventive health services rated as an A or B in the United States Preventive Service Task Force recommendations; however, no adult dental services have received this A or B rating. Consumers could be subject to cost sharing for routine preventive dental services or be required to meet the deductible before coverage of preventive services began, although as stated above, many private health plans already cover preventive health services such as cleanings before the deductible.

Looking Forward

The ACA’s EHB requirements seek to ensure consumers in the individual and small group markets have comprehensive coverage that meets vital health needs. The law requires the Secretary of HHS to define EHB that covers at least 10 general categories of benefits and has a scope equal to those “under a typical employer plan.” According to the 2023 KFF Employer Health Benefits Survey, 90% of small firms and 94% of large firms offer dental insurance programs to their employees. If the proposed 2025 Payment Rule is finalized as proposed, this will allow states to choose to include adult dental care as a required benefit in state-regulated health plans. This could enhance efforts to increase access to dental care, especially for lower income adults who are particularly susceptible to having unmet dental health needs. In addition, KFF research shows that dental costs are a contributor to medical debt. CMS and states may evaluate the most appropriate ways to structure an adult dental benefit that provides financial protections to avoid debt for common basic care, balanced by potential increases in federal costs.