Medicaid & Immigrants: Eligibility, Verification & 2025 Law Changes

Medicaid, the cornerstone of health coverage for over 81 million low-income Americans, operates under a complex framework of federal and state rules. Determining eligibility isn’t simply a matter of income; citizenship and immigration status are too critical components. Recent policy shifts, including the 2025 reconciliation law and new federal requirements for reverifying enrollee status, are poised to reshape access to care for lawfully present immigrants and introduce new administrative hurdles for states.

Federal regulations stipulate that Medicaid and the Children’s Health Insurance Program (CHIP) are generally limited to U.S. Citizens and certain lawfully present immigrants. Undocumented immigrants are explicitly excluded from federally funded coverage, including Medicare and the Affordable Care Act (ACA) Marketplaces. The landscape is becoming more restrictive. Starting October 1, 2026, the 2025 reconciliation law will further limit who qualifies, a change expected to impact access for many lawfully present individuals.

Immigration Status and Medicaid Eligibility: A Closer Look

Currently, lawfully present immigrants generally must have a “qualified non-citizen” status to be eligible for Medicaid or CHIP. However, many, including lawful permanent residents (“green card” holders), face a five-year waiting period after obtaining qualified status before they can enroll. During this waiting period, they may be eligible for subsidized coverage through the ACA Marketplaces. Certain groups, like refugees and asylees, are exempt from this five-year wait. The Trump administration reversed prior actions expanding ACA Marketplace coverage to Deferred Action for Childhood Arrivals (DACA) recipients, reinstating their ineligibility for marketplace plans as of August 25, 2025.

States have some flexibility. They can opt to cover lawfully residing children and pregnant people without the five-year waiting period through the Immigrant Children’s Health Improvement Act (ICHIA) option. States can provide prenatal care and pregnancy-related benefits to low-income children beginning at conception through the CHIP From-Conception-to-Conclude-of-Pregnancy (FCEP) option, regardless of their parent’s immigration status. Some states also offer fully state-funded coverage to fill gaps for immigrants, including those who are lawfully present and undocumented.

The 2025 reconciliation law will significantly narrow eligibility. Beginning October 1, 2026, coverage will be restricted to lawful permanent residents, Cuban and Haitian entrants, residents of the Freely Associated Nations (Marshall Islands, Micronesia and Palau), and lawfully residing children and pregnant individuals in states that have opted into the ICHIA or FCEP options. This change will eliminate eligibility for many other groups of lawfully present immigrants, including refugees and asylees without a green card.

Verifying Status and the New Reverification Initiative

States currently verify citizenship and immigration status using the Social Security Administration (SSA) and the Department of Homeland Security (DHS) Systematic Alien Verification for Entitlements (SAVE) system during the initial application process. U.S. Citizens must provide documentation, while non-citizens must demonstrate qualified immigration status. The SAVE system allows for real-time verification, but if that’s not possible, states must request additional review and documentation. Applicants generally cannot self-attest to their immigration status without supporting documentation, with exceptions for those with a military connection.

Federal rules allow states to provide Medicaid benefits during a “reasonable opportunity period” – 90 days – while immigration status is being verified, provided the applicant meets all other eligibility criteria. This allows applicants time to correct information or submit additional documentation. States receive federal matching funds for services provided during this period. However, if an applicant is determined ineligible during this period, eligibility can be terminated within 30 days, and applicants have the right to a fair hearing.

On August 19, 2025, the Centers for Medicare & Medicaid Services (CMS) announced a new initiative requiring states to reverify the citizenship and immigration status of certain Medicaid enrollees. CMS will use data from the Transformed Medicaid Statistical Information System (T-MSIS) to identify individuals whose status couldn’t be verified through SAVE and will send states a sample of these cases for review. States are then required to reverify status and disenroll those who cannot confirm eligibility.

Potential Challenges with Reverification

This new reverification process is expected to increase administrative burdens for states and could lead to coverage losses among eligible individuals. The CMS process may flag citizens for reverification due to outdated or incomplete data in the SAVE system, particularly for naturalized citizens. The T-MSIS data used by CMS is often 2-3 months behind state enrollment data, meaning CMS may flag individuals whose status has already been verified by the state. Individuals may also lose coverage if they struggle to complete the reverification process, such as missing notices or having difficulty submitting documentation.

CMS will require states to report on the outcomes of these reverification efforts, and may issue disallowances or deferrals of federal matching funds if states claim funds for services provided to individuals whose eligibility couldn’t be verified. This adds to the administrative workload for states already grappling with implementation requirements related to the 2025 reconciliation law.

Emergency Medicaid, which reimburses hospitals for emergency care provided to individuals ineligible due to their immigration status, will also be affected. Starting October 1, 2026, in states that have expanded Medicaid, federal matching payments for Emergency Medicaid for individuals who would otherwise be eligible for expansion coverage will be reduced to the state’s regular Medicaid match rate.

Navigating these changes will require careful planning and execution by states. The coming months will be critical as states prepare to implement the new requirements and address the potential challenges to ensure continued access to care for eligible individuals. Individuals with questions about their Medicaid eligibility should consult with their state’s Medicaid agency or a qualified health coverage navigator.

What’s next: CMS will continue to provide guidance to states on implementing these changes. States will be closely monitoring the impact of the new requirements on enrollment and access to care, and will likely need to adjust their processes as needed. Ongoing evaluation of the reverification process will be essential to identify and address any unintended consequences.