Federal Medicaid funding for full coverage stopped reaching many refugees and asylees on Oct. 1. From that date, the federal government no longer matches state spending on full Medicaid or Children’s Health Insurance Program benefits for those groups, and states had to apply the limit to new applicants and current enrollees alike.
A second piece is still pending. The Centers for Medicare & Medicaid Services has asked the White House budget office to approve new data codes that states would use to report coverage that ends because of immigration status. Comments on that request are due Nov. 6.
Who still draws federal funding, and who does not
CMS laid out the groups in a slide deck on Section 71109 of the 2025 budget law, Public Law 119-21. Beginning Oct. 1, 2026, section 1903(v)(5) of the Social Security Act “restricts, with limited exceptions,” federal matching funds. The groups that remain eligible for that funding are U.S. citizens and nationals, lawful permanent residents (green card holders), Cuban and Haitian entrants, and migrants from the Compact of Free Association nations. Lawful permanent residents are still subject to the five-year waiting period unless an exception applies.
The groups that lose it are “asylees, refugees, parolees, and victims of trafficking” who are not in an eligible category. CMS’s April guidance, State Health Official letter 26-001, states it directly: federal funding “will no longer be available for full Medicaid or CHIP benefits” for qualified noncitizens who fall outside those groups. Lawfully residing children and pregnant women in states that elected the CHIPRA 214 option keep full coverage.
Emergency Medicaid is a separate matter. The deck says federal funding “remains available in Medicaid for emergency Medicaid coverage after October 1, 2026.” Separate CHIP programs have no emergency coverage authority, so there is no federal funding for them at all after that date.
What a state must do before coverage ends
The federal cutoff does not erase anyone’s coverage by itself. States decide what happens next, and CMS set a process. They must first try to confirm immigration status electronically through the Department of Homeland Security’s SAVE system before contacting the enrollee. If that fails, the state asks the beneficiary for information and gives a reasonable time to respond. A person whose status still cannot be verified gets a 90-day reasonable opportunity period, which CMS says can be extended in some cases.
A Medicaid termination notice carries the clock for a fair hearing, and under the Oct. 1 rule the state must give at least ten days of it. The SNAP & Medicaid Renewal Organizer explains the 90-day window after coverage is dropped, with a pack for the household’s state.
See the 90-day window after coverage is dropped in the Medicaid Renewal Organizer →
When coverage is to end, Medicaid requires at least ten days of advance notice and an opportunity for a fair hearing. For CHIP, the state must give timely, adequate written notice and a chance for review. That notice, and the date on it, is the document an enrollee has to read closely. It says which program is ending, why, and by when a hearing or review can be requested.
CMS also said it “will not require states to provide state-only funded health coverage” to the affected group. A state can choose to pay for it with its own money, but it has to keep those costs separate from federal claims. That is why the answer to whether a particular refugee or asylee lost coverage depends on the state and on the person’s category.
The pending notice: two new termination codes
States report Medicaid and CHIP data to CMS through the Transformed Medicaid Statistical Information System, known as T-MSIS. A notice in the Federal Register on Oct. 7, 2026 (91 FR 64153) asks the Office of Management and Budget to approve a revision to that system. It says “two valid values are being added to the ELIGIBILITY-TERMINATION-REASON data element.” The notice describes the values as identifying disenrollment related to changes in immigration status or immigration verifications.
The same revision changes the valid values for the IMMIGRATION-STATUS data element to reflect Section 71109, and adds a transaction type for per-member-per-month home health service payments effective Oct. 1, 2026. The collection is under OMB control number 0938-0345. Written comments are due to OMB by Nov. 6, 2026, through reginfo.gov or Regulations.gov under document ID CMS_FRDOC_0001-4466.
The codes would give CMS a way to count terminations tied to the new rule. The April letter said states “will need to update Medicaid and CHIP data submitted to T-MSIS” to reflect federally eligible status and emergency-only coverage, with details to come. The Federal Register notice is that detail arriving. It does not change who is covered. It changes how the end of coverage is recorded.
The state paperwork behind it
States have deadlines of their own. According to Becker’s Hospital Review, state plan amendments are due Nov. 30 for CHIP and Dec. 31 for Medicaid, though the changes take effect Oct. 1. CMS has also said it already conducted financial oversight of eight states with noncitizen coverage programs and plans more, and it put the spending it identified on emergency-only noncitizens at $1.8 billion, Becker’s reported.
Medicare is touched too. CMS says Section 1899C of the Social Security Act limits Medicare eligibility for noncitizens to the same groups that qualify for federal Medicaid funding, and that dually eligible people are affected by both provisions. The agency said more Medicare guidance is coming.
Using the notice and hearing window after a termination
The first step is the termination notice itself. It names the reason, the end date and the hearing or review deadline. CMS’s own Section 71109 deck and the state Medicaid agency are the free references for what applies in a given state. A person who is in a protected category, such as a lawful permanent resident or Cuban or Haitian entrant, and whose coverage was ended because a database could not confirm status, has the reverification period and the hearing to correct it.
Gather documents before the deadline rather than after: the immigration papers that show the category, the termination notice and its envelope date, and any earlier letters from the state. Ask the agency whether the state pays for any coverage from its own funds, and whether emergency Medicaid still applies to a hospital stay.
Public comment on the T-MSIS revision is open until Nov. 6 for anyone who wants to weigh in. The Federal Register notice of Oct. 7 gives the steps.
The clock after a Medicaid notice, not after Nov. 6
A termination notice carries the date that matters for a hearing, and families that read it a week late have fewer choices than those that read it on arrival. The SNAP & Medicaid Renewal Organizer lays out the 90-day window after coverage is dropped and adds 51 state packs, so the notice’s dates can be matched to the state’s own rules.
Match a Medicaid termination notice to the 90-day window with the Renewal Organizer →
This article was produced with AI assistance and reviewed by The Financial Wire’s editorial team.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
