CMS Policy on Implementing “Alien Medicaid Eligibility”
By The Ohio Council
The Centers for Medicare & Medicaid Services (CMS) recently released a guidance letter related to noncitizen Medicaid/CHIP eligibility changes. These changes were made pursuant to H.R.1, legislation passed in 2025, which makes significant changes to the Medicaid program.
To help organizations better understand the impact of these changes and the supplemental CMS guidance, our partners at the National Council for Mental Wellbeing have published a Summary of CMS’ guidance.
Topline Summary:
Beginning October 1st, 2026, federal matching funds for full Medicaid and CHIP benefits will be limited to lawful permanent residents, Cuban-Haitian entrants, and Compact of Free Association migrants. Other noncitizens will no longer qualify for federally matched coverage, with some limited exceptions, described in detail on pg. 5 of the guidance letter. States retain the option to cover additional groups using state-only funds and may continue to use existing options such as the CHIPRA 214 state plan option for lawfully residing children and pregnant individuals.
Non-citizens who do not fall into any of the exceptions listed above will no longer be eligible for federally matched full Medicaid/CHIP. This includes such individuals as refugees, asylees, and parolees, among others. Among others, some additional key clarifications included:
Using State Funds: States will not be obligated to cover noncitizens who lose federal matching eligibility with state-only funds. If states choose to voluntarily use state funds to provide coverage, such coverages would not be considered Medicaid or CHIP.
Limited Exceptions: Emergency Medicaid (unchanged), CHIPRA 214 option for lawfully residing children and pregnant individuals, if the state elects, and CHIP Health Services initiatives.
Eligibility Redeterminations: States will be required to re-verify the immigration status of current enrollees and terminate/reduce coverages for individuals who no longer qualify.
Managed Care/Payment Impacts: If states choose to continue covering non-citizens, such care cannot be blended into standard Medicaid MCO rates and must be paid through separate contracts.
Dual Eligible Impact: CMS has flagged that related statutory changes will apply the same eligibility restrictions to Medicare, limiting coverage for noncitizens to the same categories eligible for federal Medicaid matching funds. Further guidance is expected, but providers serving dual-eligible populations should be aware of potential downstream coverage impacts.
View the National Council’s full summary document to see a complete list of the provisions that will be impacted by these changes. The Ohio Council will keep members informed on any developments related to these changes and how they might impact our ability to service those in need across Ohio.