By: Alexandra Hembrough, Esq., General Counsel, SGS
We are starting to see the effects of the One Big Beautiful Bill Act’s (OBBBA) on Medicaid. Section 71109 took effect on October 1, 2026, and it narrows which noncitizens qualify for federally funded Medicaid and Children’s Health Insurance Program (CHIP).
What Changed?
Federal matching funds for full Medicaid and CHIP coverage are not limited to U.S. citizens and nationals, lawful permanent residents, Cuban and Haitian entrants, and Compact of Free Association (COFA) migrants. Refugees, asylees, humanitarian parolees, trafficking survivors, and several other lawfully present groups no longer qualify for federally funded full coverage; however, Emergency Medicaid remains available for emergency medical conditions, but Section 71110 of OBBA lowers the federal match for those services for some individuals from the 90% expansion rate to the state’s normal rate. This lower federal match also went into effect on October 1, 2026.
How States are Responding
While states are not required to replace the lost federal funding, states may choose to cover these groups with 100% state-funded programs or local tax revenue, and some have. California, Oregon, and New York have put transition plans in place to move affected individuals off federally matched programs and into state-funded coverage. Pennsylvania’s Department of Human Services began sending notices in June to enrollees who may be affected, directing them to their County Assistance Office to confirm or update their immigration documentation. Reports indicate that roughly 8,000 Pennsylvanians are affected.
See “ACR Health Offers Help as Health Insurance Rules Change,” by Gene Morse
What It Means for Your Organization
As more patients lose Medicaid coverage, EMS agencies and other providers should expect higher volumes of self-pay accounts, uncompensated care, and bad debt for transports and treatment involving affected individuals. Additional changes are scheduled for January 1, 2027, including work and community engagement requirements and six-month eligibility renewals for expansion adults. Marketplace subsidy eligibility for lawfully present immigrants also narrows that month. Eachof these can increase coverage changes between the date of service and the date of billing. Billing operations, write-off categories, and financial forecasts will all need to account for this.
Join Us - On November 4, 2026, Asbel and I will break down these changes using real data. We’ll connect the policy changes to practical workflow decisions, examine key write-off categories, and explore how Maximum Out-of-Pocket (MOOP) Management can help identify recovery opportunities. Register HERE.
