Last week, CMS issued a letter to states providing guidance on an upcoming statutory change from the July 2025 reconciliation bill that will limit the ability to claim Medicaid and Children’s Health Insurance Program (CHIP) federal matching funds for certain individuals who are not U.S. citizens or nationals beginning October 1, 2026. According to CMS, the only noncitizen groups who will now qualify are lawful permanent residents, certain Cuban/Haitian entrants, and Compact of Free Association (COFA) migrants. This rules out several humanitarian groups including refugees, asylees, and victims of human trafficking among other groups.  

CMS administrator Dr. Oz said in a press release that this change was due to a “moral duty to safeguard our federal healthcare programs”. The letter provides states with operational guidance on the changes and the new eligibility systems, and states that CMS will provide technical assistance. There are some exceptions to the new federal changes, including some emergency medical conditions and some lawfully residing children and pregnant women. States may, but are not required to, provide state-only coverage in cases like these where federal funding is unavailable.