By MIRIAM JORDAN
Staff Reporter of THE WALL STREET JOURNAL

As many states continue to struggle with tight budgets, a rash of moves to reduce health care and other benefits for illegal immigrants has sparked an outcry among medical workers and others.

Some of the loudest criticism has arisen from Colorado's recent decision to cut off prenatal care for thousands of illegal immigrants. Critics note that these babies will by law be U.S. citizens. They also say the policy doesn't make fiscal sense, since denying such care could give rise to costlier medical problems later. The move also has raised questions about the broader public-health repercussions of withholding care from any large segment of the population. At least one nonprofit program providing health care to legal and illegal patients faces a big cut in funding.

Next month, Arizona will vote on a measure to prevent undocumented immigrants from getting public services, and to make it a misdemeanor for state employees to fail to report those who apply for services. In response to the 9/11 Commission and its recommendations on U.S. intelligence agencies, the House of Representatives voted two weeks ago to ban illegal immigrants nationwide from obtaining a driver's license.

Some efforts haven't succeeded. The Bush administration earlier this month dropped plans to require hospitals to ask emergency-room patients their immigration status, after hospitals protested. And a California initiative similar to Arizona's failed to muster enough support to qualify for the ballot.

States have been cutting back for several years. The recession and the stock market's decline bit deep into state tax collections, while spending on public safety after the Sept. 11 terrorist attacks added a new drain on state funds. Continued growth in immigrant populations, which doubled and tripled for many states in the decade starting in 1990, also has strained state resources.

Because Medicaid, which provides health care for low-income children and their parents, is the second-largest item in most state budgets after education, many states have sought to trim it. States determine eligibility under Medicaid, while the federal government reimburses them for a percentage of the expenditures. Illegal immigrants aren't eligible for Medicaid except in emergencies.

The surge in immigration combined with the wider dispersion of immigrants across the U.S. has turned the newcomers' access to health and other services into a hot-button issue. Colorado's immigrant population increased 160% between 1990 and 2000, making it No. 8 among states with the fastest growth in immigrants.

Colorado has one of the most restrictive Medicaid programs in the country, implementing the federally mandated minimum. It is the only state that has rolled back federally funded health benefits even for legal immigrants.

Last month, the state tightened its Medicaid rules another notch, scrapping a practice called presumptive eligibility that allowed any pregnant woman to receive prenatal care while the state determined whether she qualified for Medicaid. The process allowed many illegal immigrants to obtain prenatal care for up to four months, when abnormalities in the mother and the fetus usually are detected.

State officials argue that the program was being abused. The number of illegal immigrants getting prenatal care "had gotten out of control," says Karen Reinertson, executive director of the Department of Health Care Policy and Financing, the Colorado Medicaid agency. "The federal government has made clear that it doesn't want people coming to this country to receive public benefits."

The officials say clinics in the state signed up thousands of illegal immigrants for the presumptive-eligibility program, which they say was meant only for very poor U.S. citizens. About a third of the 19,000 women in Colorado who received free prenatal care last year weren't eligible because they were illegal immigrants. Colorado says that by scrapping the scheme it is merely following the letter of a federal law that limits coverage for undocumented immigrants to emergency medical services. States are allowed to use their own funds to provide prenatal care to anybody, regardless of status, as well as to use some limited federal public-health grants.

Doctors and immigrant advocates say Colorado's decision to cut the program is financially unsound. They point to studies showing that every dollar spent on prenatal care saves $3 of postpartum care.

Hypertension, diabetes and other conditions that develop during pregnancy can go undetected without early prenatal visits -- and can result in a prolonged hospital stay for a mother after she has given birth. Babies born prematurely are more likely to have disabilities and respiratory problems.

"It's a penny-wise, dollar-foolish policy," says Georges Benjamin, executive director of the American Public Health Association and former health commissioner of Washington, D.C. "A small number of babies born with complications will wipe out any savings." Some critics also highlight the fact that low-income pregnant immigrants are carrying U.S. citizens who will qualify for Medicaid once born.

Considering the greater potential for postdelivery expense, many states have created alternative programs for pregnant undocumented women. California, New York and Illinois are among states that by law guarantee prenatal care to all women. Other states, such as Texas, make prenatal care available to undocumented women through a combination of locally funded programs and federal money.

Denying preventive care and treatment also poses broader public-health risks, some experts say. "What makes good sense from a budget perspective makes very little sense from the perspective of protecting the health of the U.S. population," says Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured.

Immigrants are drawn to Colorado because it's a fast-growing state with many low-skilled jobs -- in gardening, food service and construction -- and a cost of living generally lower than that of other popular destinations, like California.

Mrs. Reinertson, the Colorado state official, says she has no idea how much the state spends each year on prenatal care for illegal immigrants. She notes that Colorado is still "paying for their deliveries, and that is not going to change." Under federal law, illegal immigrants are entitled to coverage for labor and delivery, which are considered emergency care.

The Center for Immigration Studies in Washington favors stricter controls on immigration but also supports offering health coverage to undocumented immigrants. "You can't fix this problem by trying to cut them off from more services. Once they're here, you can't now say they shouldn't get prenatal care," says Steven Camarota, the center's research director, who also calls for enforcing border security and other measures.

The controversy has left Colorado clinics that cater to low-income populations in a quandary.

"The first thing you think is that you'll have to cut back services," says Peter Leibig, who runs a network of three nonprofit health centers in the outskirts of Denver and Boulder. "We already live hand to mouth, with the bad economy -- fewer donors and more uninsured patients."

The network, known as Clinica Campesina, started as a one-nurse operation in 1977 and now serves about 25,000 people, mainly poor women and children. Staff, signs and paperwork are all bilingual in English and Spanish, reflecting the influx of Latinos who have arrived to toil in nearby fields and construction sites. About half of Clinica Campesina's patients are uninsured. About 40% are on Medicaid.

On Aug. 1, the network got a $600,000 grant from the federal government to expand the network. But Colorado's move to eliminate presumptive eligibility for prenatal care will cost Clinica Campesina $625,000 annually in lost Medicaid funding, Mr. Leibig estimates.

Yet he says he isn't about to deny prenatal care to any pregnant woman. "If part of our mission is about breaking the cycle of poverty, we are not doing our mission by allowing more U.S. citizens to be born with disabilities and low weight," he says.

Write to Miriam Jordan at miriam.jordan@wsj.com