Provider Notice issued 09/08/2026

Federal Changes to Medicaid Eligibility

The Illinois Department of Healthcare and Family Services (HFS) is issuing this notice to inform providers about:

1. Federal law changes that end Medicaid coverage for certain noncitizens as of October 1, 2026, and 
2. New federal Medicaid work requirements starting in 2027, including information about those who can be exempted from the requirement.

Please follow this link to the HFS Federal Resource Center for additional details on meeting or being exempt from the Medicaid work requirement. 

Background

On July 4, 2025, President Trump signed a bill into law that makes significant changes to the Medicaid program, limiting eligibility, cutting funding, and increasing program oversight. 

• Under this law, many noncitizen groups who were previously eligible for federally funded Medicaid coverage will be losing coverage as of October 1, 2026. 

• The law also imposes work requirements as a condition of eligibility as of January 1, 2027, for Illinois’ “ACA Adult” eligibility group.  

*ACA Adults are generally individuals who are aged 19 to 64 with household incomes up to 138% of the Federal Poverty Level, who do not have Medicare, and who do not have a dependent child under 18 in their homes.   

Details on Noncitizen Coverage Losses

On October 1, 2026, Federal Medicaid eligibility will be eliminated for many lawfully present immigrants, regardless of how long they have been in the United States. These groups include, among others:

• Refugees and asylees,  

• Humanitarian parolees, and 

• Survivors of domestic violence or human trafficking.

The only lawfully present immigrants who will remain eligible for Medicaid coverage under federal law are those who:

• Have already been admitted or adjusted for permanent residence or “green card holders” (after five years if they are subject to the five-year bar),  

• Certain entrants from Cuba and Haiti, 

• Compact of Free Association (COFA) migrants, and 

• Children under 19 and pregnant women.

If a patient has had a recent change in noncitizen status (e.g., they become a legal permanent resident), encourage them to update their status with the state so that they avoid losing coverage. 

Eligibility for fully state funded programs such as Health Benefits for Immigrant Seniors (HBIS), coverage for kidney/renal disease, survivors of domestic violence, and Asylum Applicants and Torture Victims (AATV), is not changing. For more details including copies of the notices your patients may have received about H.R. 1, please follow this link to the HFS Federal Resource Center.

Details on Work Requirements in Illinois

Medicaid work requirements only apply to ACA Adults. Thus, your patients who are in the Moms & Babies Program (pregnant and 12 month postpartum, infants < 1 year), the Family Care Program, All Kids, AABD (people 65+ or disabled under the Social Security standard), or any other coverage category will not be subject to Medicaid work requirements.

To meet the work requirement, ACA Adults will need to demonstrate:  

• Household income above $580 per month, OR 

• Being in school half time (high school, college, or trade school)

OR

• Work, paid or unpaid for 80 hours per month OR

• Community service for 80 hours per month, OR  

• Being in a work program (listed here) for 80 hours per month. 

These three activities can be combined to meet the requirement and education hours less than half time can be included in that combination, (e.g., an individual who works 40 hours and volunteers 40 hours in the same month will have met the requirement). 

Additional details on what counts toward meeting the requirement, reporting hours, and documentation for exemptions are still forthcoming and not in the purview of this notice.

Your patient may also qualify for an exemption from Medicaid work requirements. Individuals can be exempt if they are: 

• A former foster youth who is under 26 years old

• Pregnant or are receiving postpartum benefits under the Moms & Babies program

• An American Indian/Alaska Native, an American Urban Indian, a California Indian, a member of a recognized tribe, or qualified to receive healthcare through the Indian Health Service (IHS)

• A parent, guardian, caretaker relative, or family caregiver (paid or unpaid) of a dependent child who is under 14 years old or a person with a disability 

• A Veteran with a Veterans’ Administration disability rating of 100%

• A person with special medical needs (“medically frail”), meaning that they have health issues that prevent them from meeting work requirements, like:

*Being blind or disabled under Social Security standards

*Having a substance use condition (drug or alcohol) 

*Having a serious mental health condition

*Having a physical, intellectual, or developmental disability that makes it hard for you to perform daily activities 

*Having a serious or complex medical condition that requires regular treatment

• Receiving Temporary Assistance for Needy Families (TANF) benefits and meeting TANF work requirements 

• Participating in a drug addiction or alcohol treatment program 

• An inmate of a public institution (prison or jail) currently or within the last 3 months

The Supplemental Nutrition Assistance Program (SNAP) also has work requirements for some people, and some of the exemptions are the same for Medicaid. 

• If we can use our information to exempt a patient from both programs, we will.  

• If an individual has both SNAP and Medicaid and must meet work requirements for both, they can be exempt from Medicaid work requirements if they are meeting work requirements for SNAP, or if they are in a month of their 3-month SNAP grace period.

Individuals may also be exempted from work requirements if they are experiencing a short-term hardship. These hardships include: 

• Living in a county with a federally declared emergency or with a high unemployment rate. 

• HFS will determine this and notify individuals if they meet these exemptions.  

• Being an inpatient in a hospital, rehab facility, intermediate care facility for individuals with intellectual disabilities, or inpatient psychiatric hospital. 

• Individuals must request this exemption in order to receive it.

• Having to travel outside of their community for an extended period for medical services to treat a serious or complex medical condition that are not available in their community.

*Individuals must request this exemption in order to receive it. 

What role will providers have in the exemption process in the future? 

The role that providers like you will play in the work requirement exemption process remains undecided. The federal Centers for Medicare & Medicaid Services (CMS) has indicated that they will be clarifying their expectations on this in the near future.

Until then, you can help your patients with special medical needs understand that keeping up with appointments will be an important way for HFS to see their medical care services. Seeing medical care services in Medicaid claims data will help HFS determine that they may be exempt from the work requirement based on their health.

What can you do now? 

First, it is critical that you understand who is and who is not impacted by the noncitizen eligibility changes and by the new work requirement, including the timing of the changes, for your practice’s awareness and for patient education purposes. 

You can also encourage your patients to create Manage My Case accounts, or to find and store their login information for an existing account. Please also connect them with resources as needed, including on the HFS website.

Laura Phelan, Administrator
Division of Medical Programs