Impacts of New Rules on SNAP and Medicaid

Millions of Americans who depend on government safety net programs will face significant changes soon. New rules from President Donald Trump’s budget law will start next month.

SNAP and Medicaid Reforms

The changes impact both the Supplemental Nutrition Assistance Program (SNAP) and Medicaid, the nation’s health insurance program for low-income Americans. Experts suggest the reforms could improve accountability and cut federal spending. However, they may also increase hardship for vulnerable households and shift billions in costs to states.

“The changes coming this fall represent one of the bigger shifts in the financial relationship between Washington, the states, and Americans who rely on safety net programs,” Alex Beene, financial literacy instructor at the University of Tennessee at Martin, told Newsweek.

Importance of SNAP

SNAP supports over 40 million people each month. Medicaid offers health coverage to tens of millions of low-income Americans and those with disabilities.

Upcoming Changes

States Will Pay More for SNAP

Starting October 1, the federal government will reduce its share of SNAP administrative costs from 50% to 25%. This mandates states to cover 75% of program costs. The U.S. Department of Agriculture implements this change under the One Big Beautiful Bill. Although benefits won’t directly decrease, states may respond by reducing their administrative staff, potentially slowing processing times.

New SNAP Cost-Sharing Arrives Later

Beginning October 2027, some states must contribute to SNAP benefit costs if their payment error rates exceed federal limits. Historically, SNAP benefits have been fully federally funded.

Medicaid Eligibility Changes

This change affects Medicaid eligibility for many lawful non-citizens. As directed by the Centers for Medicare & Medicaid Services, full-scope federal Medicaid funding will limit eligibility to: U.S. citizens and nationals, lawful permanent residents, Cuban-Haitian entrants, and citizens of Compact of Free Association nations. Many groups, such as refugee survivors, might lose federally funded Medicaid starting October 1 unless state funds provide alternative coverage.

Medicaid Work Requirements

The One Big Beautiful Bill introduces Medicaid work requirements starting January 2027. Certain able-bodied adults aged 19 to 64 must complete at least 80 hours per month of approved activities, such as work, job training, or education, to maintain eligibility. This aims to increase workforce participation while preserving Medicaid for vulnerable populations.

“This rule helps Americans build skills and independence through work, education, job training, or community service, creating new opportunities for themselves and their families,” stated CMS Administrator Mehmet Oz.

Concerns exist about potential loss of benefits for some Americans, which may lead to worse health outcomes and higher debt levels. Feeding America highlighted that the bill might worsen food insecurity nationwide, removing access to vital resources from millions, including children, seniors, veterans, and people with disabilities.

Immediate and Future Steps

Both SNAP administrative changes and Medicaid immigrant eligibility restrictions are set for October 1.

“These changes occur because Republicans argue that work requirements will encourage employment, reduce improper enrollment, and ensure Medicaid resources go to eligible beneficiaries,” noted Kevin Thompson, CEO of 9i Capital Group.

Yet, he added that many affected beneficiaries already work; additional reporting may cause eligible individuals to lose coverage due to bureaucracy rather than employment status.