Part 1 of CAFP’s H.R. 1 Implementation Series
Several provisions of H.R. 1, the federal 2025 budget reconciliation law, begin taking effect this fall. As of October 1, 2026, new federal restrictions on Medicaid and CHIP eligibility for certain lawfully present immigrants are in effect. These changes limit access to federally funded Medicaid and CHIP coverage for certain immigrant populations, while Emergency Medicaid remains available to individuals who meet the applicable eligibility requirements.
In California, the state will continue providing state-funded full-scope Medi-Cal coverage to affected individuals during the transition. Beginning January 1, 2027, Medi-Cal members with Unsatisfactory Immigration Status (UIS) will transition from managed care to fee-for-service (FFS) Medi-Cal. This changes how care is delivered and paid for, not the scope of coverage. Members who renew on time will retain full-scope Medi-Cal and access to covered medically necessary services.
Additional H.R. 1 Changes Coming Soon
Several other major H.R. 1 provisions are scheduled to take effect January 1, 2027, including:
- Medicaid work and community engagement requirements: Most adults ages 19–64 enrolled through the ACA Medicaid expansion pathway will be required to complete at least 80 hours per month of work, community service, education or another qualifying activity, unless an exemption applies.
- More frequent eligibility redeterminations: States will begin implementing six-month eligibility checks for certain adults enrolled through the Medicaid expansion, rather than annual renewals. California’s implementation of six-month renewals is scheduled for March 1, 2027.
- Reduced retroactive coverage: Retroactive Medicaid coverage will be shortened from the current three-month period to one month for expansion adults and two months for other Medicaid enrollees.
- Address verification and duplicate enrollment checks: States will be required to use additional data sources to verify enrollee addresses and identify individuals who may be enrolled in Medicaid in more than one state.
- Changes to federal Medicaid financing: H.R. 1 also begins implementing changes to Medicaid financing, including new restrictions on state-directed payments and provider taxes that will affect states and Medicaid providers over time.
Resources and Implementation Updates
DHCS and CalHHS have released resources to help providers, plans, counties and other stakeholders understand and prepare for the changes:
- DHCS H.R. 1 Implementation Plan: DHCS is assessing the eligibility, verification, operational and systems changes needed to implement H.R. 1.
Read DHCS’ H.R. 1 Implementation Plan
- CalHHS Stakeholder Webinars: CalHHS hosts regular webinars covering federal changes and California’s implementation, including impacts on Medi-Cal and CalFresh.
View CalHHS webinars
- UIS/FFS Transition Policy Guide: DHCS has released guidance for transitioning UIS members from managed care to Medi-Cal FFS, including member notifications, continuity-of-care expectations, provider enrollment and data-sharing requirements.
Read the DHCS UIS/FFS Policy Guide
How Physicians Can Prepare
Physicians can take steps now to help minimize disruptions in coverage and care as these changes are implemented:
- Encourage Medi-Cal patients to keep their contact information current and respond promptly to renewal and eligibility notices.
- Help patients understand upcoming renewal requirements and connect them with Medi-Cal enrollment assistance or trusted community resources when needed.
- Identify patients who may be affected by work requirements or other eligibility changes and help document qualifying exemptions when appropriate.
- Prepare for the UIS transition to FFS Medi-Cal by reviewing provider enrollment, billing and claims processes and understanding how continuity of care will work after January 1.
- Continue monitoring DHCS guidance and implementation timelines, as additional operational details and requirements will be released as implementation progresses.
- Talk with care coordination and administrative staff about how the changes may affect scheduling, coverage verification, referrals and continuity of treatment.
CAFP will continue to monitor federal and state implementation of H.R. 1 and provide updates as additional guidance and requirements are released. A complete timeline of H.R. 1 implementation can be found here.
