Why healthcare executives are concerned about new H-1B visa fees

The Trump administration’s recent changes to the H-1B visa application process are raising concerns among health care experts, with many fearing the plan will worsen the sector’s workforce crisis and access to care gaps.

Last month, the White House imposed a $100,000 fee for new H-1B visa applications. Previously, fees typically ranged between $2,000 and $5,000, depending on the employer. These new fees only apply to new H-1B visa applicants, not current H1-B holders whose employers are seeking to renew their visas.

The H-1B program, created in 1990, was created to allow U.S. employers to temporarily hire foreign professionals in specialized fields like healthcare, technology and engineering to fill labor shortages – but the White House says the program has “been deliberately exploited to replace, rather than supplement, American workers with a lower-paid, less-skilled workforce.”

Besides fees, the White House plan also aims to prioritize more skilled international workers. The administration is establishing a weighted lottery system that favors H-1B applicants with higher salaries, saying this will protect domestic employees from wage competition and ensure that H-1B visas are used to fill positions that require highly skilled professionals.

Although these changes are intended to limit abuse of the program, the overhead applies to all sectors and has raised legal concerns about the administration’s authority and its adherence to policy-making procedures. Several lawsuits have already been filed to challenge this measure.

For example, a coalition of health care employers, unions, and religious groups filed a lawsuit to block the change on October 3, and a group of higher education organizations did the same on October 6.

The American Hospital Association urged the Department of Homeland Security to exempt health care professionals from the new H-1B visa changes, arguing it would worsen staffing shortages and increase burnout, particularly in rural and underserved communities.

High costs imposed on providers who cannot afford them

The U.S. health care system relies heavily on clinical workers from around the world, with Census Bureau and Bureau of Labor and Statistics data showing the sector employs about 262,000 doctors and about 500,000 foreign-born nurses, even though the vast majority are not H-1B visa holders.

The country supplements its clinical staff with international workers on this scale out of absolute necessity. According to the most recent data from the Health Resources and Services Administration, the United States is projected to have a shortage of 187,130 full-time equivalent physicians by 2037, with rural areas experiencing the most severe gaps. For nurses, projections from the National Center for Health Workforce Analysis indicate a 6% shortage nationally by 2037, rising to 13% in nonmetropolitan areas.

Most of the country’s foreign-born clinicians are not recipients of H-1B visas – many holding a green card, using other temporary visas like J-1 or TN visas, or being naturalized U.S. citizens. In fiscal year 2024, only 8,492 of the 141,205 approved H-1B visa applications went to healthcare workers, and another According to the Department of Homeland Security, 8,445 of the 258,190 H-1B visas approved for renewal were awarded to workers in this sector.

Yet many providers still rely on H-1B workers to keep critical services running, noted Jimmy Lai, CEO of the Oklahoma City-based law firm Lai & Turner.

Unless the Department of Homeland Security grants an exemption to health care providers, the new fees would expose these provider organizations to “seven or even eight-figure annual liabilities,” Lai said.

“For mid-sized community hospitals, clinics and practices, $100,000 per new hire is often prohibitive. These employers typically rely on H-1B clinicians to fill critical shortages,” he said.

Another health care immigration attorney — John Dawson of the Cincinnati-based Musillo Unkenholt law firm — agreed that very few health care providers will be able or willing to pay the new $100,000 fee per H-1B hire.

Instead, hospitals could be forced to freeze hiring, increase shifts for existing staff or rely more on expensive traveling nurses — or, in extreme cases, close departments or facilities, Dawson said.

He finds some hope in the ongoing legal challenges to block the imposition of this new tax. The lawsuits focus on whether the executive branch has the authority to enact a tax without congressional approval, with the plaintiffs arguing the change violates the Administrative Procedure Act.

Various institutions — including health care staffing companies, unions, higher education groups, nonprofits and religious organizations — have filed lawsuits, and Dawson believes more legal challenges could be on the way, although many are awaiting clarification on the exemptions.

“One important thing we are looking at is that the proclamation talks about the national interest exemption,” he noted. “We still don’t have any basic guidance from the government as to what that’s going to look like, but we hope that a number of healthcare-related professions will be included on that list of exemptions that will be adopted.”

Until the White House clarifies which roles qualify for exemptions, hospitals and clinics may be forced to delay hiring or reduce services.

International clinicians stabilize U.S. providers

Health care providers are relying on foreign-born clinicians not only to address workforce shortages but also to fill experience gaps, pointed out Kara Murphy, president of healthcare staffing firm PRS Global. Her company focuses on international recruiting and onboarding, primarily for Filipino nurses working in U.S. hospitals.

H-1B visas cover positions that require at least a bachelor’s degree, and in the healthcare field, workers receiving this visa are typically specialty nurses, doctors, medical laboratory scientists and physical/occupational therapists, Murphy explained. She explained that the hospitals PRS Global works with typically hire international staff for areas such as intensive care units, emergency departments and other services that use floating staff to deal with shortages.

Murphy noted that hospitals often need international hires to mentor new domestic graduates, explaining that relying on these experienced clinicians can help reduce burnout.

“For the hospitals we work with, as they recruit international nurses, they become preceptors pretty quickly. That ends up helping new graduates increase their retention,” Murphy explained.

Hospitals face high turnover rates among recently graduated nurses – with about 30% leaving within their first year – due to burnout and violence within hospital units, she added.

A Filipino nurse recruited by PRS Global — who spoke anonymously due to the sensitive nature of current immigration issues — said she knew full well that rural hospitals would struggle to fill positions if the pool of foreign-born workers dwindled.

At the hospital where she works in rural Missouri, about 30 percent of the nursing staff comes from overseas, she said.

“Without international nurses, the staff shortage would worsen very quickly. This would lead to higher burnout among remaining staff, which could affect patient safety and satisfaction,” she said.

Potential slowdown in innovation

In addition to negatively impacting the country’s clinical workforce, the new H1-B visa fees could also slow the pace of innovation in the nation’s healthcare sector.

About 65% of H-1B visa holders work in the technology sector, which often overlaps significantly with the digital health, medical device, and pharmaceutical sectors. The majority of these H-1B workers are from India.

Making it harder for foreigners to work in the tech sector could disrupt the speed of healthcare innovation – including the development of new drugs, medical devices and AI tools in healthcare – because a significant portion of the workforce leading this R&D is made up of immigrant talent, Sujay Saha noted. Twenty years ago, he came to the United States from India on an H-1B visa to work as an IT consultant, and he is currently president of Cortico-X, a business consulting firm.

“The United States is going to lose some of its edge, so to speak, in health care technology and innovation,” Saha noted.

Ultimately, American companies could respond to this new tax by creating satellite innovation centers abroad if costs become too prohibitive to attract international workers to the United States, he added.

Until the Trump administration clarifies the exemptions or Congress intervenes, the impact of these changes remains unclear. But without clear guidance, the combined pressures of staffing shortages and slowing innovation could ripple through the U.S. health care system for years to come.

Photo: Evgenia Parajanian, Getty Images