As compliance dates approach for states’ compliance with provisions in HR 1 regarding Medicaid eligibility, states and the federal government will begin sending notices about eligibility changes and adverse determinations, which could include termination of Medicaid coverage.

These actions, driven by the provisions in HR 1 (also referred to as the One Big Beautiful Bill (OBBB), PL 119-21, and the Working Families Tax Cut Legislation (WFTCL) ), the flagship legislation enacted July 4, 2025, that make major changes to healthcare eligibility and payment, particularly in Medicare and Medicaid, including significant modifications to Medicaid eligibility for the Medicaid Expansion population, along with limitations on states’ abilities to raise funds and pay providers. In addition, the law also limits eligibility for noncitizens in both Medicare (section 71201) and Medicaid (section 71109). The changes to eligibility in both sections and programs are the same, though the timelines vary slightly.

New parameters of eligibility for both programs

Under the new law, only individuals falling into one of the below categories will remain eligible for Medicare, Medicaid, or tax credits for Affordable Care Act plans. Some exceptions to the below categories continue to exist in Medicaid for emergency care.

• Citizens of the United States
• Legal permanent residents, typically referred to as green card holders
• Specific Cuban and Haitian entrants, and
• Compact of Free Association (COFA) migrants

What categories of non-citizens are losing coverage?

Multiple immigrant statuses face termination or ineligibility, though the majority of changes will occur for:

• Asylees, temporary protected status holders, and refugees,
• Victims of domestic violence or human trafficking,
• Humanitarian parolees, such as those fleeing conflict in their home country, or those that have supported the U.S military abroad.

What is the timing for the eligibility changes for non-citizens?

As compliance dates approach, states and the federal government will begin sending notices about eligibility changes and adverse determinations- including termination of Medicaid coverage.

Medicare

For individuals newly eligible after the law was signed by the president on July 4, 2025, need to fall into one of the four above categories. Additionally, individuals who were eligible for Medicare before the July 4 enactment will need to meet one of the above four categorical eligibility criteria or be terminated from Medicare on January 4, 2027.

Medicaid

Some states may continue to cover some newly  or legacy covered ineligible individuals with state-only funds; true Medicaid eligibility inclusive of federal matching funds will end on October 1, 2026.

How many people are losing Medicare and Medicaid coverage?

Estimates for coverage losses from each program were mentioned by the Congressional Budget Office (CBO) following enactment of the legislation. Those estimates assumed coverage loss in each Medicare and Medicaid at 100,000 immigrants, with the potential for some overlap for dually eligible individuals. More recently, states have been assessing coverage losses, and releasing estimated figures.  Estimates on coverage loss from states typically also include voluntary disenrollments because of the termination of tax credit availability for ACA marketplace plans for the same population, muddying the totals that LeadingAge members care most about. Even less information is available about the subset of individuals who may be receiving Medicaid-funded long-term care. An April 8 letter from CMS to states reiterates states’ obligations to assure proper enrollment in Medicaid programs but fails to mention the long-term care population.

Some states, upon an individual’s application to Medicaid, collect and have available data on immigration status, while others will need additional information from individuals or reciprocal data sources. One example: individuals who have been deemed Medicaid eligible by virtue of Supplemental Security Income (SSI) eligibility. The Social Security Administration (SSA)does not collect information on immigrant status when establishing eligibility for SSI. Therefore, states engaging in data sharing with the SSA to establish reciprocal eligibility for Medicaid are struggling to verify compliance with these new requirements.

Conclusion

Much confusion exists among states and individuals about who will be affected by these provisions. Some states have a handle on the impacted Medicaid population, while others are left guessing and face potential federal disallowance. For newly ineligible individuals enrolled in long-term care programs and receiving nursing home care or home and community based services, the loss of Medicaid will mean the end of their services. Members serving these individuals will be left to find other sources of revenue to cover their costs of care or discharge them from their patient roles if states don’t continue state-funded coverage. Some states will work to provider coverage through state-only funds; that is not guaranteed and will vary widely from state to state.

On the Medicare side, states will not have information on immigration status, and communication to affected individuals will come from the Social Security Administration. Provider exposure on the Medicare side could also be a concern following the January 4, 2027 termination of coverage.