OBBBA Cuts Kick in October 1 for Non-Citizens on Medical Assistance

October 1, 2026

Today (October 1), two significant provisions of the “One Big Beautiful Bill Act” (OBBBA, 2025) affecting non-citizen adults on Medical Assistance (MA; Minnesota Medicaid) take effect.  

The first provision significantly limits the eligibility criteria for “qualified non-citizens” for the purposes of MA eligibility. Before today, a “qualified non-citizen” included the following categories: 

1. lawful permanent resident, 

2. refugee, 

3. parolee paroled into U.S. for at least one year, 

4. abused spouse or child that meets certain criteria, 

5. victim of human trafficking that meets certain criteria, 

6. a Cuban or Haitian entrant, or 

7. a citizen of the Freely Associated States (COFA) residing in states and territories. 

As of today, the OBBBA restricts the definition of “qualified non-citizens” to criteria 1, 6, and 7 only. According to the Minnesota Department of Human Services (DHS), more than 5,000 Minnesotans will lose Medicaid coverage. DHS said, however, that many of these people will be able to switch to MinnesotaCare, which provides subsidized health insurance to low-income Minnesotans who are ineligible for Medicaid.  

DHS is working hard to limit gaps in coverage for this population through automatic MinnesotaCare redeterminations, and enrollment support communications. As of September 17, 2026, DHS reports that 4,000 people have been reassessed as eligible for MinnesotaCare, 200 people have been determined ineligible for MinnesotaCare (and have been offered support in shopping for individual plans on MNsure), and 600 people have been determined as needing to taking additional action to discern MinnesotaCare eligibility. 

The second provision significantly reduces the amount of money hospitals receive in federal funds for offering emergency services to people who are undocumented.  

Under federal law, hospitals must provide emergency care to anyone, regardless of their immigration status or ability to pay. Emergency Medicaid reimburses hospitals for emergency care provided to people with undocumented status who would qualify for Medicaid, but for their undocumented status. Historically, for every $1 states spend on Emergency Medicaid for childless adults with undocumented status, the federal government has contributed $9 in federal matching funds.  

The OBBBA reduces the federal matching rate for Emergency Medicaid for childless adults with undocumented status. Moving forward, for every $1 states spend for this population, the federal government will contribute $1 to $3.33, depending on the state’s per-capita income. 
 
DHS estimates that this provision alone will cost Minnesota up to $13.6 million per year in lost federal funding.  

Last year, the MMA launched “The One Big Beautiful Bill Act (OBBBA) Resource Guide for Physicians” to help Minnesota practitioners understand how key provisions of the law will affect their practice and patients. You can find the guide here.