Major Medicaid Changes for Refugees and Asylees: What You Need to Know

Major Medicaid Changes for Refugees and Asylees Begin October 1, 2026

Starting October 1, 2026, significant changes to federal Medicaid and CHIP funding will affect many lawfully present immigrants. These changes, stemming from Section 71109 of the 2025 budget law (Public Law 119-21), will limit federal funding for health coverage to four main groups: U.S. citizens and nationals, lawful permanent residents (green card holders), Cuban and Haitian entrants, and individuals from the Marshall Islands, Micronesia, and Palau under the Compacts of Free Association. This means that refugees, asylees, humanitarian parolees, and survivors of human trafficking will lose access to full, federally funded Medicaid and CHIP benefits. While these changes are substantial, some exceptions and state-level options remain.

The Congressional Budget Office estimated that these restrictions could lead to approximately 100,000 more people becoming uninsured by 2034. This shift in federal funding means that states are not required to use their own money to cover these groups. However, certain provisions, like emergency Medicaid and a state option for children and pregnant individuals, will continue to provide some level of coverage. Understanding these changes and the available exceptions is crucial for those who may be affected.

Who Loses Full Medicaid and CHIP Coverage

The most significant impact of the new law will be on individuals who have historically been treated as refugees for benefit purposes. Under previous laws, refugees and asylees could enroll in Medicaid immediately, without a waiting period. Other federal laws extended similar immediate eligibility to certain trafficking survivors and specific Afghan and Ukrainian parolees.

As of October 1, 2026, these groups will no longer qualify for federal matching funds for full Medicaid and CHIP benefits unless they also hold a green card or meet specific exceptions. This means that refugees and asylees without a green card will primarily be limited to emergency Medicaid coverage. Similarly, humanitarian parolees and trafficking survivors will also see their full coverage reduced to emergency services.

The Five-Year Wait for Green Card Holders

While green card holders remain eligible for federal Medicaid and CHIP funding, the existing five-year waiting period still applies to most of them. However, individuals who were previously refugees or asylees and later adjusted their status to become lawful permanent residents will continue to be exempt from this waiting period. This means a former refugee who now holds a green card will not face a new lockout period for federal benefits.

Exceptions That Continue to Provide Coverage

Despite the broad restrictions, the law includes three key exceptions that will continue to allow certain individuals to receive coverage. The Centers for Medicare and Medicaid Services (CMS) has confirmed that these exceptions are not altered by the new legislation.

Emergency Medicaid

One of the most important exceptions is emergency Medicaid. This program continues to cover treatment for emergency medical conditions, including labor and delivery, for individuals who meet their state’s income and residency requirements, regardless of their immigration status. This ensures that critical medical needs can still be addressed.

The CHIPRA 214 Option

Another significant exception is the CHIPRA 214 option, which allows states to use federal funds to cover lawfully residing children and pregnant individuals. As of April 2026, 39 states, the District of Columbia, and three territories had adopted this option. Under this provision, refugee children and pregnant asylees residing in these states can maintain full Medicaid and CHIP coverage.

Health Services Initiatives

State-designed CHIP programs aimed at improving the health of low-income children also remain fundable. These programs can continue to provide benefits to eligible children, offering another avenue for coverage in some states.

What Happens to Individuals Already Enrolled

For those currently enrolled in Medicaid or CHIP, coverage will not end abruptly on October 1. Federal rules require states to review each affected person’s case, attempt to verify their status through the Department of Homeland Security’s SAVE database, and provide advance written notice of at least 10 days before terminating benefits. This notice must include information about the right to a fair hearing.

If an enrollee’s status cannot be verified, the state must request information from the individual and allow a reasonable period to respond. If an enrollee provides new information, such as proof of a recently approved green card, the state must offer a 90-day period to submit documentation. Before any coverage is terminated, states must explore all other potential eligibility bases, including the CHIPRA 214 option and emergency Medicaid.

Continuous Eligibility and Separate CHIP Programs

Individuals in a Medicaid continuous eligibility period, including those with continuous postpartum coverage, will transition to emergency Medicaid for the remainder of their period if they do not qualify under the CHIPRA 214 option. For children in separate CHIP programs, federal funding will end on October 1, as these programs do not have an emergency coverage category.

State Options for Continued Coverage

While federal funding is restricted, states have the option to use their own funds to continue providing health coverage to groups who lose federal benefits. Some states are already moving in this direction. For example, California and Oregon are transitioning affected immigrants into state-funded programs. New York has a long-standing court ruling that requires state-funded coverage for lawfully present immigrants who would otherwise qualify for Medicaid.

However, the trend in many states is not towards expanding coverage. Some states have reduced immigrant coverage in their health programs, while others have closed enrollment or lowered benefit caps. Therefore, whether an affected individual can retain coverage after October 1 heavily depends on their state of residence.

Future Changes to Medicare and Marketplace Subsidies

The changes to Medicaid and CHIP are part of a broader set of health coverage restrictions in the new law. Similar limitations will affect Medicare and Affordable Care Act (ACA) Marketplace subsidies.

Medicare Eligibility

The new eligibility limits for Medicare began applying to new applicants on July 4, 2025. For individuals already enrolled in Medicare before that date who do not hold a qualifying status, coverage will end starting January 4, 2027. The Social Security Administration is responsible for identifying these individuals and notifying them.

ACA Marketplace Subsidies

ACA Marketplace subsidies will also see changes. Starting with the 2026 tax year, lawfully present immigrants with incomes below 100% of the federal poverty level who were previously eligible for premium tax credits due to Medicaid ineligibility will lose that option. Furthermore, for tax years beginning after December 31, 2026, premium tax credits will be restricted to green card holders, Cuban and Haitian entrants, and COFA migrants. These changes are projected to leave hundreds of thousands of people uninsured.

Public Charge Rule and Green Card Applications

Many families worry that using health programs could negatively impact their green card applications under public charge rules. For refugees and asylees adjusting their status, this is generally not a concern. Individuals adjusting status under Section 209 of the Immigration and Nationality Act as refugees or asylees are not subject to the public charge ground of inadmissibility, and using emergency Medicaid or state-funded coverage does not alter this.

For other individuals, it is advisable to check how the current public charge rules apply to their specific situation. The most effective long-term step for refugees and asylees to regain full federal eligibility for Medicaid, Medicare, and Marketplace subsidies is to adjust to permanent residence. This will ensure they meet the requirements under all three of the new H.R. 1 provisions.

Steps to Take Before and After October 1

Affected individuals should take proactive steps to understand their situation and ensure they maintain any available coverage.

Respond to State Requests

It is essential to respond promptly to any requests for information or documentation from your state Medicaid agency. Missing deadlines is a common reason for losing benefits that might otherwise be retained.

Report Immigration Status Changes

If you have obtained a green card, inform your state Medicaid agency immediately and provide a copy of your card or approval notice. As a lawful permanent resident, you will retain federal eligibility, and as a former refugee or asylee, you remain exempt from the five-year waiting period.

Inquire About Children and Pregnancy Coverage

If your state utilizes the CHIPRA 214 option, inquire about coverage for children and pregnant individuals in your household. This option can ensure continued full benefits for these vulnerable groups.

Review Notices and Request Hearings

Carefully read any termination notices from your state Medicaid agency. If you believe the notice is incorrect, request a fair hearing before the termination date. This request typically keeps benefits active until a decision is made.

Understand Emergency Coverage

Remember that emergency Medicaid, including coverage for labor and delivery, remains available if you meet your state’s income and residency requirements. This is a critical safety net for urgent medical needs.

Explore State and Local Options

Investigate state-funded programs and utilize community health centers, which often offer services on a sliding scale regardless of insurance or immigration status. Newly arrived refugees should consult their resettlement agency regarding Refugee Medical Assistance.

Plan for 2027 Marketplace Coverage

If you rely on Marketplace subsidies and are not among the four protected groups, be aware that premium tax credits will end after the 2026 plan year. Begin budgeting for full-price premiums or exploring alternative coverage options for 2027.

For refugees and asylees who have delayed applying for a green card, the changes in federal benefits provide a strong incentive to adjust their status promptly. Securing permanent residence will restore federal eligibility for Medicaid, Medicare, and Marketplace subsidies, ensuring continued access to healthcare.

Frequently Asked Questions