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Illinois Medicaid - HFSMedicaid · Coverage · Provider Notice · ILHigh impact

Federal Changes to Medicaid Eligibility

Effective date
Not stated in the notice
Identified
Sep 9, 2026

Summary

Illinois Department of Healthcare and Family Services announces two major Medicaid eligibility changes: (1) Federal law eliminates Medicaid coverage for most lawfully present noncitizens effective October 1, 2026, with limited exceptions for green card holders, certain entrants from Cuba/Haiti, COFA migrants, and children under 19 and pregnant women; (2) New federal work requirements for ACA Adults (ages 19-64 with income up to 138% FPL) effective January 1, 2027, with specific exemptions for medically frail, caregivers, veterans, pregnant women, foster youth, and others. Billing teams must identify affected patient populations and implement eligibility verification procedures before both dates.

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What to do

Action · 4 steps
01REQUIREMENTS: By September 30, 2026: Billing and eligibility teams must (1) audit current patient roster to identify noncitizen Medicaid beneficiaries, particularly refugees, asylees, humanitarian parolees, and survivors of domestic violence/human trafficking who will lose coverage on October 1, 2026; (2) update eligibility verification systems to flag and terminate coverage for ineligible noncitizens effective October 1, 2026; (3) create patient notification process to inform affected beneficiaries of coverage loss and alternative programs (HBIS, AATV, etc.); (4) train front desk and billing staff on remaining eligible noncitizen groups (green card holders, Cuba/Haiti entrants, COFA migrants, children under 19, pregnant women).
02Before January 1, 2027: Billing and clinical teams must (1) identify all ACA Adult patients subject to work requirements; (2) implement documentation system to capture and track work requirement exemption status (medically frail, caregiver status, TANF receipt, etc.) for each ACA Adult patient; (3) establish process for providers to document medical necessity for exemptions related to special medical needs, with emphasis on keeping records of appointments and Medicaid claims data; (4) create encounter form additions or EMR templates to capture work requirement exemption information at each visit; (5) train clinical staff on exemption categories and encourage patients to establish Manage My Case accounts; (6) coordinate with state HFS regarding provider role in exemption documentation process once CMS clarifies expectations.
03Immediate: Contact HFS Federal Resource Center for supplemental guidance on noncitizen coverage loss notices, work requirement reporting procedures, and documentation standards.
04Monitor HFS website for forthcoming clarifications on provider role in work requirement exemption determination and required documentation.

Original notice

Federal Changes to Medicaid Eligibility
hfs.illinois.gov · Always check the source before changing claims.
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