DEPARTMENT OF HEALTH & HUMAN SERVICES 
                                                                                      Health Care Financing Administration 
____________________________________________________________________________ 
                                                                                Center for Medicaid and State Operations  
                                                                                                                7500 Security Boulevard 
                                                                                                            Baltimore, MD 21244-1850 
 
 
o 
JUN I  1998 
 
Dear State Medicaid Director: 
 
The purpose of this letter is to make you aware of statutory provisions enacted in the 
Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (P.L. 104-208) 
and described in interim regulations published by the Immigration and Naturalization 
Service (INS) on October 20, 1997. In brief, this provision authorizes States to recover 
from immigrants' sponsors the unreimbursed costs of Medicaid benefits paid on behalf 
of certain immigrants. 
 
This letter informs you of these provisions and explains their relationship to other rules 
regarding sponsors of aliens and Medicaid recoveries. For reasons described below, the 
rules at issue in this letter will have a limited impact on Medicaid. Nonetheless, we felt 
States should be alerted to the implications of this new law. 
 
In the interest of clarity, we wish to emphasize that the policies contained in this letter 
pertain only to recoveries from immigrants' sponsors, and do not change the prohibitions 
against recoveries from the immigrants themselves, as described in our letter of 
December 17, 1997 to you. (We have enclosed a copy of that letter for your 
information). The only circumstances under which you may seek to recover for 
legitimate Medicaid expenditures related to immigrants are those described in the 
subsequent portion of this letter, where the recovery is from a sponsor who has an 
obligation under immigration law to pay. The prohibitions described in our earlier letter 
relate to recoveries from the immigrants themselves for Medicaid benefits they or a 
family member legitimately received. 
 
As explained in the October 20, 1997 interim INS rule, the new provisions are effective 
for immigrants who file with the INS on or after December 19, 1997, for an immigrant 
visa, for admission as an immigrant, or for adjustment of status, who are applying as: a) 
an immediate relative, b) a family-based immigrant, or c) an employment-based 
immigrant, and who, in order to be admissible, are required to have a sponsor who signs 
an affidavit of support under section 213A of the INS Act. States will be able to obtain 
information about sponsorship from the INS. 
 
In signing such an affidavit, the sponsor agrees to provide financial support to the 
immigrant, and also agrees to reimburse any agencies which provide means-tested 
public benefits (e.g., Medicaid) to a sponsored immigrant. After the State applies the 
sponsor-to-alien deeming criteria, should the sponsored immigrant obtain any Medicaid.  Page 2 - State Medicaid Directors 
 
benefits, the agency may sue the sponsor in Federal or State court to recover any unreimbursed 
Medicaid costs for those benefits, except for emergency services which are excluded from 
recovery. Procedural requirements that you must follow in doing this are more fully described in 
the October 20, 1997 INS rule 
 
We believe that the impact on Medicaid would be limited for three reasons. First, most persons 
filing for admission as an immigrant on or after the effective date of this new rule are banned 
from receiving non-emergency Medicaid services for five years under section 403(a) of the 
Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). 
Therefore, in most cases, there should be no Medicaid expenditures to recover in the first place. 
 
Second, those groups of immigrants who would be eligible for the full Medicaid benefit package 
are not populous. Veterans and persons on active duty in the U.S. military, their spouses and 
dependent children and their unremarried surviving spouses are exempt from the 5 year ban. 
Refugees, asylees, aliens whose deportation is being withheld, immigrants who are Cuban or 
Haitian entrants, and certain Amerasian immigrants are also exempt. Consequently, the number 
of newly admitted permanent residents in these categories who receive Medicaid benefits, who 
will subsequently acquire sponsors that are subject to the affidavit of support and from whom 
recoveries may be pursued is small. 
 
Third, even when the five year ban is not at issue, States will be required to attribute the income 
and assets of the sponsor when determining the immigrant's eligibility for Medicaid. The 
sponsor-to-alien deeming rule continues for as long as the sponsor is obliged under INS rules to 
provide support, in most cases until the immigrant becomes a citizen. A separate SMD letter is 
being developed and will be issued soon to explain the HCFA policy to be applied when a 
sponsored alien is subject to the deeming of the sponsor income and resources. 
 
If you have any questions about this issue, you can contact either Mark Ross on (410) 786-5855, 
or Robert Tomlinson on (410) 786-4463. 
 
 
Sincerely, 
 
                    /s/
Sally Richardson 
. 
Director 
Center for Medicaid and State Operations 
 
Enclosure 
 
cc: 
All Regional Administrators All Associate Regional Administrators for Medicaid and 
State Operations Jennifer Baxendell, NGA Joy Wilson, NCSL 
Lee Partridge, APWA