Judge Chhabria to Allow Limited CMS-ICE Medicaid Data Sharing Starting Jan. 5, Sources Say

The Ruling

U.S. District Judge Vince Chhabria is expected to issue an order by Dec. 29 that will allow the Centers for Medicare and Medicaid Services to resume sharing a narrow set of Medicaid enrollee data with Immigration and Customs Enforcement, but only for individuals who are not lawfully present in the United States and only within the 22 states and the District of Columbia that are suing the administration, according to two DOJ officials familiar with the case and a lawyer for the plaintiff states. The ruling will modify the preliminary injunction that Chhabria entered on Aug. 12, 2025, in State of California v. U.S. Department of Health and Human Services, No. 3:25-cv-05536, in the Northern District of California.

The Aug. 12 injunction blocked the Department of Health and Human Services from transferring state Medicaid data to the Department of Homeland Security after the states showed the data sharing had been implemented without the reasoned decision making required by the Administrative Procedure Act. The order gave the agencies two choices: terminate the sharing or complete a reasoned process, including any necessary rulemaking, and wait 14 days before restarting. On Nov. 21, HHS filed a notice telling the court that it had finished that process, and on Nov. 25 CMS published a Federal Register notice describing the new information sharing policy.

Chhabria has spent the last four weeks reviewing the administrative record, including the CMS notice and an Oct. 27 ICE memorandum that described the categories of information the agency intends to request. Two court clerks who have worked on the case said the judge is preparing an order that finds the agencies satisfied the Aug. 12 requirement for a reasoned explanation but still imposes tight limits on what can be disclosed. The order is expected to be filed by Dec. 29 and would permit sharing to begin on Jan. 5, 2026, the officials said.

What Can Be Shared

The order will permit CMS to share information only if it comes from the Medicaid program, pertains only to noncitizens who are not lawfully residing in the United States, and includes no more than five data elements: citizenship and immigration status, address, phone number, date of birth, and Medicaid identification number. The lawyer for the plaintiff states, who was briefed on a draft of the order, said Chhabria will explicitly bar the disclosure of health records, medical diagnoses, treatment information, or any data about lawfully present immigrants and U.S. citizens.

The restriction to unlawfully present noncitizens is significant because undocumented immigrants are already ineligible for federally funded Medicaid. Several plaintiff states, including California, New York, Washington, Oregon, Illinois, Minnesota, Colorado, and the District of Columbia, use state funds to cover some undocumented residents. The EPI Policy Watch database estimates the affected population includes roughly 1.6 million Californians, 500,000 New Yorkers, 105,000 Oregonians, 30,000 Illinoisans, 20,187 Minnesotans, 15,000 Coloradans, 13,000 Washingtonians, and 27,000 residents of the District of Columbia.

The case began after the Associated Press reported on June 14, 2025, that HHS had provided deportation officials with personal data, including immigration status, on millions of Medicaid enrollees. The data set included information from California, Illinois, Washington, and the District of Columbia. California Attorney General Rob Bonta led a coalition of 19 states and the District of Columbia in filing suit on July 1, 2025, alleging that the transfer violated privacy protections, the Administrative Procedure Act, and the Spending Clause. The coalition later grew to 22 states plus the District of Columbia.

The administration has defended the sharing as part of a broader crackdown on illegal immigration that began with Executive Order 14218, issued by President Donald Trump on Feb. 19, 2025. That order directed federal departments to take steps to prevent undocumented immigrants from receiving taxpayer funded benefits. CMS Administrator Mehmet Oz has said the agency is trying to stop more than $1 billion in improper spending, a figure several plaintiff states dispute.

What Happens Next

The ruling will not end the litigation. The plaintiff states are expected to ask Chhabria to clarify how the government must sever lawful resident and citizen data from the records it already holds, a process that could delay the Jan. 5 start date in practice. The states may also appeal the narrowed injunction to the U.S. Court of Appeals for the Ninth Circuit, though the lawyer for the plaintiffs said no final decision has been made.

Public health advocates have warned that even the limited disclosure could discourage immigrant families from enrolling in Medicaid, including U.S. citizen children who are legally entitled to coverage. The Kaiser Family Foundation and the New York Times published a survey in late 2025 showing that one in five adults in immigrant families with children had already reported chilling effects on public benefit receipt. Healthcare providers in California and New York said this week that they are preparing for an uptick in cancelled appointments if the order takes effect.

Watch for three developments in the next 48 to 72 hours. First, the exact language of Chhabria's order, which will determine whether ICE can request additional information on a case by case basis. Second, any immediate appeal by the plaintiff states to the Ninth Circuit. Third, guidance from state Medicaid agencies on how they will notify enrollees that the federal government may share limited biographical data with immigration authorities.