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
