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Massachusetts is wrestling with the first major cut to its landmark health care law after lawmakers eliminated subsidized insurance to thousands of legal immigrants — and now are weighing whether to partially restore it.

The state budget approved by lawmakers last month ended health care funding for nearly 30,000 legal immigrants enrolled in the subsidized care plan that is the core of the law, a cut that saves the state an estimated $130 million. Gov. Deval Patrick signed the budget, but asked lawmakers to partially reinstate the coverage by restoring $70 million.

“These are hardworking people who are contributing through their taxes,” Patrick said. “If we mean what we say when we say health care for all, then they ought to be included.”

The decision to eliminate insurance coverage for legal immigrants is the latest test for the state’s experiment with providing health care to virtually all residents. The 2006 law has made Massachusetts a proving ground for some of the proposals being weighed as Congress and President Barack Obama debate dramatically expanding health coverage nationally.

State legislative leaders said they had little choice but to cut spending given the state’s fiscal straits. Tax collections in Massachusetts for the fiscal year that ended June 30 fell 12.5 percent compared with last year, coming in about $3.2 billion under the original estimate.

The fiscal situation continues to crumble, but lawmakers are still hoping to reach “some kind of resolution” on the immigrant health care, House Speaker Robert DeLeo said Tuesday.

“My goal today is … to see if we can come to a place that we can all feel comfortable with while at the same time being mindful of the financial condition we are in,” said DeLeo, D-Winthrop.

A compromise proposal to be debated Wednesday by House and Senate lawmakers would restore $40 million to the immigrant health care program.

The 2006 law created Commonwealth Care, a subsidized plan to provide insurance to those earning up to three times the federal poverty level. The state picks up all the cost of legal immigrants in the plan, while the state and federal governments split the cost of providing care to virtually everyone else in it.

Eva Millona, the executive director of the Massachusetts Immigrant & Refugee Advocacy Coalition, said she is worried that denying subsidized care to legal, tax-paying immigrants will set a bad precedent for the health care debate in Washington.

“If we cut 30,000 legal immigrants, then the message we send nationally is that health care cannot be done, or that it can be done in a way that excludes legal immigrants,” she said. “It’s completely unfair and unjust.”

Massachusetts hospitals say the cut in subsidized care to legal immigrants could end up costing them $87 million in the new fiscal year.

“Because hospitals are there to serve this population, when they become sick, the cost to provide that care will be carried by the hospitals,” said Tim Gens of the Massachusetts Hospital Association.

Boston Cardinal Sean O’Malley has also criticized the cut, saying it would be a “tragic mistake” to drop legal immigrants from the Commonwealth Care program.

The health care law has been beset by rising costs at a time when the state is struggling with plunging revenues. The authority overseeing the law recently voted to trim $115 million in spending in part by no longer automatically re-enrolling individuals in Commonwealth Care.

For Bazlul Wahab, who arrived in the country nearly two decades ago and is now a U.S. citizen, the Massachusetts law has been “a blessing.” His mother, Rahima, came to the U.S. from Bangladesh in 2006 on an immigrant’s visa and he worried she’d be unable to treat her high blood pressure, diabetes and arthritis — until Massachusetts passed its health insurance mandate.

He, his wife and children are all insured through his job. He wasn’t able to add his 63-year-old mother to that policy, so Wahab signed her up for Commonwealth Care. Under the plan, doctor visits are covered and his mother is responsible for co-pays on medication.

“Because of that, she has been healthy for her age. She’s doing well,” said the 37-year-old Woburn resident, who works as a composites engineer. “I’m sure this has helped her avoid going to the emergency room.”