2025 Federal and State
Changes
Healthcare Program Changes
Terminology
• Expansion States - States that expanded their Medicaid programs and offered new products in a health care exchange either in the state or using the federal exchange, implementing the Affordable Care Act. • California did this - expansion of Covered California, our healthcare exchange, offering premium stipend assistance for California residents in qualifying income categories
Terminology
• Expanded Populations -
• Able bodied adults without dependents. This population was not eligible for Medicaid and was the medical responsibility of the County of residence. • Mendocino County combined forces with 33 other small counties in California to meet this need by means of the County Medical Services Program (CMSP)
• California used the ACA expansion to offer the population with Medi-Cal eligibility to “able bodied adults with no dependents”. This was a new eligible population category as of the ACA. This changed coverage for the “medically indigent adult population”
Federal Public Benefit (FPB)
• July 10, 2025 – Trump Administration announces new interpretation of the term "federal public benefit" (FPB) under Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), replacing the 1998 interpretation.
• July 14, 2025 – New interpretation published on Registrar and effective immediately with program specific guidance to come.
• Health Centers are newly listed as FPB
• Additional programs also listed as FPB
Medicaid (Medi-Cal) Qualifications Revised
• As a condition of Medicaid eligibility: Able-bodied adults between the ages 19-64 without dependents will have to demonstrate upon application and redetermination:
o a monthly income of at least the fed. minimum wage; OR at least 80 hours per month of work, community service, or qualifying participation in an educational program for:
o 1-3 consecutive months preceding the month of application to Medicaid; o 1 or more months (whether or not consecutive) during the period between redeterminations as verified by the state as part of the regularly scheduled redetermination of eligibility;
o an average monthly income over the preceding 6 months that is at least the fed. minimum wage AND is a seasonal worker.
• Exemptions (Some are up to the state to institute)
Income and Timeline
• Adults with no dependents who earn $1,305- $1,800 per month must be working, enrolled in school or volunteering a minimum of 80 hours per month to retain their Medi-Cal coverage (current poverty levels) • June 1, 2026 - The HHS secretary must put forward an interim final rule • January 1, 2027 - State Medicaid programs are required to implement this policy
• December 31, 2028 - HHS waiver for good faith exemption from these requirements ends
Other Changes Affecting Eligibility
• Eligibility Verification
• December 31, 2025 - The HHS secretary must issue implementation guidance • January 1, 2027 - State Medicaid programs are required to implement • States are required to make redeterminations every 6 months for Medicaid Expansion Adults: able bodied adults without dependents. • Retroactive Coverage
• January 1, 2027
• Limits retroactive coverage to one month prior to application for coverage for expansion enrollees and two months prior to application for coverage for traditional enrollees.
Premiums for Medi-Cal and Service Co-Pays
• Modifying Cost Sharing Requirements for Certain Expansion Individuals Under the Medicaid Program
• Effective October 1, 2028, would add mandatory deductions, cost-sharing for certain Medicaid Expansion enrollees (with incomes over 100% of the federal poverty line). Cost-sharing must be “greater than $0,” but cannot exceed $35, for any particular health care item or service rendered. o Sets a total aggregate limit on cost sharing of 5% of family income (as applied on a quarterly or monthly basis)
• Medicaid-participating providers would be allowed to refuse care to enrollees who do not pay the required cost-sharing amount at the time of service (although, providers are permitted to waive the cost-sharing requirements on a case-by-case basis).
• Services exempted from cost sharing: emergency, family planning, pregnancy and preventive care AND any primary care services, mental health care services, substance use disorder services, or services provided by a Federally Qualified Health Center (FQHC), Rural Health Center (RHC), or certified community behavioral health clinic.
Eligibility Limits by Residency Status
• Medicaid
• Changes to the definition of “qualified immigrant” to include only:
o lawful permanent residents,
o certain Cuban and Haitian immigrants, and
o individuals residing in the United States through a Compact of Free Association (COFA migrants) • Current list of Medicaid eligible status classes are in notes • Medicare
• Restricts Immigrant Medicare eligibility to:
o lawful permanent residents,
o certain Cuban and Haitian immigrants, and
o individuals residing in the United States through a Compact of Free Association (COFA migrants). • Mandates the Social Security Commissioner must identify and notify Medicare enrollees who are no longer eligible within one year of enactment and terminate enrollment within 18 months of enactment.
Rural Health Transformation Program
• The Good News
• Application Due: December 31, 2025
• Allotments: FY26-FY30
o Creates a new Rural Health Transformation grants program administered by CMS and appropriating $50B over FY2026-FY2030 ($10B/FY) with funding flowing through states and a requirement to submit a “rural health transformation plan” to HHS o Distributes 50% of funds equally among all approved states, 40% based on a methodology determined by the Administrator for applicants meeting specified need-based criteria. The remaining 10% is allocated to CMS to cover administrative expenses. o Applications for funding must be submitted to the Administrator by December 31, 2025. o Eligible providers include rural hospitals, rural health clinics, FQHCs, community mental health centers, and opioid treatment programs.
Additional Changes
• Tax Credits for Health Insurance Premiums Paid
• Rules change based on immigration status
• Federal Medical Assistance Percentage (FMAP)
• Amount federal government will match costs to the Medicaid programs for states who cover healthcare services in cases of emergency based on immigration status. Begins 10/1/2026 • State Directed Payments (Expansion States- California) • Reductions being 1/1/2028
• Caps the total payment amount for State Directed Payments made for inpatient hospital services, outpatient hospital services, nursing facility services, or qualified practitioner services at an academic medical center
Legal Challenges and More
• Many of the executive orders are facing legal challenges • FQHCs across the country are required to attest to compliance with executive orders each time we drawdown federal funds from our grants
• We are now required to change terminology and data we are reporting to our federal oversight department (HRSA)
• Funds for the next federal fiscal year have been allocated and FQHCs remain funded at 100% of prior year funding.
• Mendocino Coast Clinics Newsletter-
• https://mailchi.mp/mccinc/protecting-community-health-in-uncertain-times Mendocino Coast Clinics
Established July 1,1994
Lucresha Renteria
Executive Director
[email protected]
707-964-1251 ext. 3433
www.mendocinocoastclinics.org