The federal government has been giving hospitals $20 billion annually to reimburse them for emergency care for the uninsured, including undocumented immigrants, The New York Times reported.
Under the Affordable Care Act, such funding will be cut in half by 2019, based on the assumption that fewer people will lack insurance after the law takes effect. However, an estimated 11 million undocumented immigrants are currently living in the United States and are not covered by the law, but are guaranteed treatment in emergency rooms by a federal law.
Obama's healthcare act did call for increasing the number of so-called "safety-net" hospitals -- a national network of 1,200 community health centers that provide primary care to people without insurance, regardless of their immigration status -- however that provision was cut by Congress.
Wendy Z. Goldstein, the chief executive at Lutheran Medical Center in New York City, which operates a number of safety-net hospitals, estimated about 20 percent of the hospital's patients were what she called "the undocumented -- not only uninsured, but uninsurable."
"This is an unintended consequence of the law," Goldstein said. "But so far, nobody is doing anything to resolve it."
Groups in favor of tighter immigration policies say cuts in the $20 billion fund will be a burden on hospitals.
Mark Krikorian, the executive director of one such group, the Center for Immigration Studies in Washington, said the answer to the situation is enforcing strict immigration laws.
"There is no ideal resolution to the problem, other than reducing the illegal population," Krikorian said. "Incorporating illegal immigrants into health exchanges or directly taxpayer-funded health care legitimizes their presence."
The Obama administration said it is working on measures to get hospitals in need of those funds cash in other ways, such as a raise in payments for primary care and giving bonuses for improvements in quality.
"We are taking important steps to make health care more affordable and accessible for millions of Americans," Erin Shields Britt, a spokeswoman for the Department of Health and Human Services, said in an e-mail. "Health reform isn't the place to fix our broken immigration system."