By skyforbes 
What Section 71110 of the One Big Beautiful Bill Means for Emergency Medicaid Care to Non-Citizens without Lawful Status
Every chief financial officer and chief operating officer who manages a safety net footprint is familiar with the uneasy arithmetic of emergency care for individuals who fall outside full Medicaid eligibility. Federal law requires Medicaid to pay for the treatment of an emergency medical condition for certain non-citizens who are otherwise eligible, except for their immigration status. States have long covered this “Emergency Medicaid” slice, and where states adopted the Affordable Care Act (ACA) adult expansion, many of those same emergency claims have drawn the enhanced federal matching rate that applies to the expansion population. Section 71110 of the new One Big Beautiful Bill changes that equation. Beginning in Fiscal Year 2027, the federal contribution for these emergency services will no longer increase in line with the enhanced rate of expansion. Instead, it will be capped at the state’s regular Federal Medical Assistance Percentage (FMAP), the baseline rates each state receives for its traditional Medicaid population.
For leaders who live in the numbers, that shift sounds technical. It is not. Moving from a ninety percent federal match (the ACA “floor” for expansion adults once the complete phase-in occurred) down to a state’s standard FMAP, which ranges from fifty percent in wealthier states to the upper seventies in lower-income states and occasionally higher for specific territories, reassigns real costs to state budgets. In expansion states that have relied on the higher match to cushion the fiscal blow of mandated emergency care for individuals who are not lawfully present, the change functions as a federal cost shift. It also comes at a time when many states face softening revenue forecasts, rising Medicaid enrollment volatility following the unwinding of continuous coverage, and mounting pressure on provider rates. Leaders need to understand where those costs currently fall, how the new cap will impact budget negotiations, and what operational countermeasures can be implemented to mitigate the impact while preserving access to time-sensitive care.
When states expanded Medicaid to low-income adults under the ACA, the law established a much higher federal match for that expansion group, ninety percent once the phase-down was completed. Because Emergency Medicaid claims are tied back to the eligibility category the person would otherwise meet, some emergency claims associated with individuals who would have been in the expansion group received the enhanced rate. Not all states coded and tracked these claims the same way. Still, for many expansion states, the net effect was a generous federal share for emergency care delivered to non-citizens without lawful status who met income and other criteria. The enhanced match mitigated the cost of large safety net caseloads in high-immigration regions.
Why Does This Matter Financially? Budget exposure. If your state relied on the enhanced match, the delta between the enhanced rate and the baseline FMAP becomes a direct cost increase starting in FY2027. Finance teams should quantify historic Emergency Medicaid outlays attributed to expansion-eligible codes and model the new state share. Because emergency events are volatile, use multi-year averages and stress tests that model surge scenarios (e.g., influenza spikes, heat-related labor events in agriculture-heavy counties, and border influx periods).
Provider reimbursement pressure. States that cannot absorb the new cost may respond by tightening reimbursement methodologies, delaying payments, narrowing the definitions of covered services within the emergency window, or shifting a greater burden of uncompensated care to hospitals. Safety net systems that already manage thin margins will feel the pinch first. Expect more scrutiny around what qualifies as an emergency medical condition. Coding and clinical documentation improvement teams should partner now. Clear, time-stamped notes that distinguish emergent stabilization services from non-emergent follow-up limit denials.
Timely eligibility screening. Because eligibility hinges on whether the individual would qualify but for their immigration status, front-end registration staff must accurately and efficiently capture income and household data. Delayed data can result in denied claims when a tighter fiscal environment triggers more aggressive review and data integration across agencies. Section 71110 will motivate states to reconcile Emergency Medicaid claims with broader eligibility files to ensure correct FMAP claiming. If your health system feeds encounter data to the state, could you verify that the data sets include the fields the state will use to segregate emergency claims from ongoing care?
Imagine a state with a 60 percent regular FMAP and a 90 percent enhanced expansion match. Last year, the state reported $200 million in Emergency Medicaid claims tied to individuals who met the expansion income criteria but lacked lawful immigration status. Under current rules, the federal government pays 180 million (90 percent), leaving 20 million to be covered by state or local financing. Under Section 71110, the federal share would fall to 120 million. The state share would jump to $ 80 million, a $60 million increase. If the state cannot add new general fund dollars, it may trim provider rates, reduce optional services elsewhere in Medicaid, or rework supplemental pools. That ripple may reach your operating margin even if your direct Emergency Medicaid volume is low.
Practical Steps for Healthcare Leaders: Map Your Exposure. Pull three years of emergency department and inpatient claims flagged as Emergency Medicaid or self-pay with subsequent retroactive emergency eligibility determinations. Stratify by diagnosis-related groups, obstetric services, trauma, and high acuity medical events (stroke, myocardial infarction, sepsis) to see where volumes cluster. Engage state Medicaid early. Offer to pilot improved eligibility data exchange. The state gains cleaner claims; you gain faster determinations and fewer unpaid accounts. Strengthen community referral networks. When patients leave after an emergency episode without a clear pathway to primary care, they often return at a higher acuity. Partner with federally qualified health centers, charity clinics, and local health departments to create a post-emergency soft landing that protects clinical continuity without triggering unpaid non-emergency claims. Educate governing boards. Many trustees assume the ACA enhanced rate still applies universally. Illustrating a simple slide showing the FY2027 change, your state FMAP, and projected local cost exposure will reset expectations before budgets lock.