CMS Requires States to Cut Medicaid Coverage for Some Noncitizens

The Centers for Medicare and Medicaid Services 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 processes, and claims processing.

The policy represents a significant shift in how states can use federal matching funds for noncitizen residents. State Medicaid agencies will need to reprogram their eligibility determination systems, train staff on new verification requirements, and update beneficiary communications—all within a six-month window.

Healthcare administrators and patient advocates say the timeline is aggressive and could result in coverage gaps for vulnerable populations during the transition. State Medicaid directors are urging CMS to provide additional implementation guidance and technical support to meet the October deadline.