CMS Issues New Guidance on Medicaid and CHIP Funding Limits for Certain Noncitizens

Apr 16, 2026

2 minutes

CMS Issues New Guidance on Medicaid and CHIP Funding Limits for Certain Noncitizens

CMS has issued new guidance to help states prepare for a policy change that begins on October 01, 2026. Under this change, states will face new limits on claiming federal matching funds for Medicaid and the Children’s Health Insurance Program (CHIP) for certain noncitizens. This includes people who are not U.S. citizens or U.S. nationals, along with other groups named in federal law.

CMS said the guidance is meant to help states understand their role and apply the new rules correctly.

“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 letter explains how states should carry out Section 71109 of the Working Families Tax Cut legislation, Public Law 119-21. It gives direction on eligibility systems, applications, verification, and claims processing. CMS will also offer technical help and use its current oversight tools to support compliance and accurate federal fund claims.

Some exceptions remain under the new limits. Federal Medicaid matching funds will still be available for the treatment of emergency medical conditions. The law also does not change the option for states to cover lawfully residing children and pregnant women through Medicaid and CHIP. It also does not affect matching funds for Health Services Initiatives in CHIP.

To view the State Health Official letter, visit: https://www.medicaid.gov/federal-policy-guidance/downloads/sho26001.pdf

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