CMS Issues Guidance on New Medicaid and CHIP Funding Limits for Noncitizens
Summary
CMS issued guidance implementing new limits on federal Medicaid and CHIP matching funds for certain noncitizens under Public Law 119-21 Section 71109. States must implement system changes by October 1, 2026, including updates to eligibility systems, applications, verification, and claims processing. Exceptions exist for emergency medical conditions and coverage of lawfully residing children and pregnant women.
What changed
CMS released guidance requiring states to implement restrictions on federal Medicaid and CHIP matching funds for certain noncitizens starting October 1, 2026. The guidance covers eligibility systems, applications, verification, and claims processing under Public Law 119-21 Section 71109. Exceptions include emergency medical conditions and optional coverage for lawfully residing children and pregnant women.\n\nState Medicaid and CHIP agencies must update systems and train staff to implement the new limitations. CMS will provide technical assistance and use existing oversight tools to ensure compliance. Healthcare providers serving affected populations should monitor eligibility changes and verify coverage status for noncitizen patients as systems transition.
What to do next
- Review the SHO letter at medicaid.gov for operational implementation requirements
- Update Medicaid and CHIP eligibility systems to reflect new noncitizen coverage limitations
- Revise claims processing workflows for affected populations before October 1, 2026
Archived snapshot
Apr 8, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Press Releases Apr 08, 2026
CMS Issues Guidance to Implement New Limits on Federal Medicaid and CHIP Funding for Certain Noncitizens
Administration Coverage Medicaid & CHIP Share
CMS Issues Guidance to Implement New Limits on Federal Medicaid and CHIP Funding for Certain Noncitizens
CMS is preparing states for an upcoming change that will limit the ability to claim federal matching funds for Medicaid and the Children’s Health Insurance Program (CHIP) for individuals who are not U.S. citizens or U.S. nationals, or who fall into specific noncitizen categories identified in statute. New guidance issued today will ensure states understand their responsibility in implementing this statutory change beginning October 1, 2026.
“The Trump Administration has a public mandate, a statutory obligation, and a moral duty to safeguard our federal healthcare programs,” said CMS Administrator Dr. Mehmet Oz. “Today, we’re honoring all three by providing clear guidelines to help states follow the law and safeguard taxpayer dollars.”
The State Health Official (SHO) letter on implementation of section 71109 of the Working Families Tax Cut legislation (Public Law 119-21) provides states with operational guidance on eligibility systems, applications, verification, and claims processing. CMS will provide technical assistance and use existing oversight tools to support compliance and ensure accurate claiming of federal funds.
Exceptions to the coverage limitations include continued availability of Federal Medicaid matching funds for the treatment of emergency medical conditions. Additionally, the statutory changes do not apply to the option states have to cover lawfully residing children and pregnant women in Medicaid and CHIP or to matching funds for Health Services Initiatives in CHIP.
To view the SHO letter, visit: https://www.medicaid.gov/federal-policy-guidance/downloads/sho26001.pdf
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