Sneak Preview: CMS To Cut Medicaid/CHIP for Certain Noncitizens
(The following was excerpted from a recent Thompson Grants Compliance Expert article.) State health officials, as of Oct. 1, generally will be restricted from obtaining Medicaid and Children’s Health Insurance Program (CHIP) reimbursement for nonemergency medical services provided to certain non-U.S. citizens who would no longer be eligible for program benefits, according to a recent Centers for Medicare and Medicaid Services (CMS) policy letter addressing the implementation of Section 71109 of the One Big Beautiful Bill Act (OBBBA) (Pub. L. 119-21). States will need to make information technology (IT) system and operational changes necessary by that date to ensure that they can properly claim reimbursements.
For now, U.S. citizens and certain lawfully present noncitizens are eligible for Medicaid if they meet other requirements under the program. However, Section 71109 of OBBBA — which CMS calls the Working Family Tax Cut (WFTC) legislation — places certain limitations on Medicaid and CHIP coverage.
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) (Pub. L. 104-193), which made certain “qualified aliens” — called “qualified noncitizens” by CMS — such as lawful permanent residents (LPRs), refugees and asylees, eligible for federal public benefits including Medicaid and CHIP coverage if they meet all other eligibility requirements in the state (e.g., residency, income).
In accordance with PRWORA, many qualified noncitizens are subject to a five-year waiting period before becoming eligible for full Medicaid or CHIP coverage, but some noncitizens (e.g., refugees and asylees) are exempted from the five-year waiting period. The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) (Pub. L. 111-3) authorized an option (known as the “CHIPRA 214 option”) for states to provide full Medicaid and CHIP coverage to children (up to age 21 for Medicaid and up to age 19 for CHIP) and pregnant women who are lawfully residing in the U.S., without having to meet the five-year waiting period, if otherwise applicable.
Section 71109, however, shortens the list of eligible populations for Medicaid. It restricts, with limited exceptions, Medicaid and CHIP reimbursement for nonemergency medical assistance, and for child and pregnancy-related health assistance to include only individuals in the following categories as long as they are a resident in a state or U.S. territory and are either a: (1) U.S. citizen/U.S. national; (2) LPR/green card holder; (3) eligible Cuban/Haitian entrant; or (4) Compact of Free Association (COFA) migrant from the Marshall Islands, Micronesia and Palau. Therefore, as of Oct. 1, such Medicaid and CHIP assistance will not be available to asylees, refugees, parolees or victims of trafficking, unless they have another immigrant status or category that meets the definition of Medicaid/CHIP-eligible noncitizen, according to the implementation letter.
(The full version of this story has now been made available to all for a limited time here.)
Join us for our following Thompson Grants event:
Federal Grants Forum | April 28-29, 2026 | Washington, D.C.
