CMS releases guidance on limits to Medicaid, CHIP funding for certain noncitizens

The Centers for Medicare and Medicaid Services April 8 issued guidance on implementing a provision within the reconciliation bill passed in July 2025 regarding federal matching funds for full Medicaid and Children's Health Insurance Program benefits for certain U.S. residents. Beginning Oct. 1, federal matching funds for full Medicaid and CHIP benefits will be restricted to legal permanent residents, certain Cuban and Haitian immigrants, and Compact of Free Association migrants lawfully residing in the U.S. Other lawfully present noncitizens, including refugees, asylees, parolees and victims of trafficking will no longer be eligible for full Medicaid or CHIP benefits with federal matching funds. CMS clarified that the law does not change the Personal Responsibility and Work Opportunity Act's definitions or underlying immigration eligibility rules, but instead limits when federal match is available, and that states are not required to provide state-only coverage where federal funding is unavailable. The guidance outlines required state actions to implement these changes, including eligibility redeterminations for current enrollees, updates to eligibility and verification systems, managed care and financial claiming procedures and submission of Medicaid and CHIP state plan amendments. CMS reiterated that federal matching funds remain available for emergency Medicaid.