By David N. Harding, Staff Writer
On May 22, 2025, the U.S. House of Representatives passed H.R.1, nicknamed the One Big Beautiful Bill Act, a sweeping budget reconciliation package designed to reduce federal spending, adjust tax policy, and raise the debt ceiling. While the legislation covers a broad policy landscape, two major safety net programs face direct and significant reform: the Supplemental Nutrition Assistance Program (SNAP) and Medicaid.
This writing examines the law’s impact on these programs, with a focus on what the Congressional Budget Office (CBO), Congressional Research Service (CRS), and other nonpartisan institutions report about its likely effects on current beneficiaries, program costs, and state administration.
SNAP: More Stringent Requirements, Lower Federal Spending
Benefit Formula Freezes
The bill limits updates to the Thrifty Food Plan, which determines SNAP benefit levels. Under current law, the USDA reevaluates this plan every five years to reflect food prices and nutritional guidelines. H.R.1 permits only annual inflation-based adjustments, blocking broader increases that reflect evolving food costs and dietary recommendations. This change is expected to lower projected benefit levels over time, reducing food purchasing power for participating households.
Expanded Work Requirements
H.R.1 raises the age limit for SNAP work requirements to 64 and narrows exemptions for caregivers. Currently, most adults without dependents must work or participate in training for 20 hours per week to retain eligibility. Under the new law, parents with children over age 6 are also subject to these conditions. The CBO estimates this provision will reduce SNAP enrollment by 3.2 million individuals in an average month by 2034.
Fewer Waivers for High-Unemployment Areas
The law also restricts states from granting work requirement waivers in areas with high unemployment. The waiver process will now rely on more narrowly defined local data, reducing states’ ability to exempt individuals even in distressed economies. States’ ability to use discretionary exemptions is also curtailed, falling from 8 percent of the caseload to just 1 percent.
Reductions in Allowable Deductions
H.R.1 makes technical changes that reduce allowable deductions used to calculate SNAP eligibility and benefits. For instance, only households with elderly or disabled members receiving energy assistance (LIHEAP) will be able to claim the standard utility deduction. Internet costs will no longer count as allowable utility expenses. These changes could cause some households to lose eligibility or see reduced benefit amounts.
State Funding Responsibilities and Administrative Burdens
Currently, the federal government fully funds SNAP benefits and shares administrative costs with states. Starting in fiscal year 2028, states will assume a share of benefit costs based on their payment error rates, ranging from 5 to 25 percent. The CRS summary explains that federal reimbursement for state administrative expenses will be reduced from 50 percent to 25 percent. These provisions are expected to shift significant costs to state governments, potentially influencing program operations or eligibility enforcement.
Eligibility Changes for Immigrants
H.R.1 tightens eligibility for certain categories of legal immigrants. While refugees and other humanitarian entrants currently qualify for SNAP under specific conditions, the bill limits eligibility to U.S. citizens, lawful permanent residents, and a few specific noncitizen groups. The CBO projects that this provision will newly disqualify between 120,000 and 250,000 people from food aid.
Fraud and Duplication Controls
States will be required to participate in a National Accuracy Clearinghouse to prevent individuals from receiving SNAP in multiple states. Although these fraud prevention tools are supported by lawmakers on both sides of the aisle, the Government Accountability Office notes that such cases are uncommon and account for a small fraction of overall program costs.
Medicaid: New Eligibility, Work Mandates, and Cost-Sharing
Verification and “Program Integrity” Measures
The law requires states to perform more frequent eligibility verification checks using federal death records and cross-state enrollment data. While these provisions aim to reduce improper payments, the CRS highlights that such administrative actions could unintentionally result in disenrolling eligible individuals due to documentation errors or outdated information.
More Frequent Renewal Requirements
Medicaid expansion enrollees will now undergo income and eligibility redetermination every six months, instead of annually. According to KFF, shorter redetermination periods are linked to increased “churn,” or temporary loss of coverage among people who still meet eligibility criteria but fail to complete paperwork on time.
Work Requirements for Coverage
H.R.1 introduces a national work requirement for adults aged 19 to 64 enrolled through the Affordable Care Act’s Medicaid expansion. Beneficiaries must verify 80 hours per month of work, job training, or volunteer service. Exemptions apply to people with serious health conditions, disabilities, pregnancy, or caregiving responsibilities for young children. This provision is modeled after state-level policies like Arkansas’s 2018 experiment, which led to thousands losing coverage primarily due to reporting failures, according to a Health Affairs study. The CBO projects that up to 16 million individuals will lose health coverage by 2034, largely due to these work requirements and related eligibility policies.
New Cost-Sharing Obligations
Starting in 2029, expansion enrollees with incomes above 100 percent of the federal poverty level will be required to pay cost-sharing for medical services. Charges are capped at $35 per service, with a monthly or quarterly out-of-pocket limit of 5 percent of household income. Some services, such as emergency care and primary care, are exempt. However, studies consistently show that cost-sharing reduces utilization among low-income patients and may lead to delays in necessary care.
Funding Conditions, Provider Restrictions, and Structural Changes
State-Level Funding Penalties
States that use their own funds to provide coverage to undocumented immigrants will see a reduction in their federal matching rate for ACA expansion populations. This is aimed at discouraging states from offering publicly funded coverage to individuals who are not lawfully present, even if no federal Medicaid funds are used. The law also ends enhanced federal matching incentives for states that newly expand Medicaid after January 1, 2026.
Limitations on Medicaid Provider Payments
The bill restricts the use of provider taxes and state-directed payments that states often use to draw down additional federal Medicaid dollars. These rules are designed to limit perceived overuse of financial arrangements that artificially inflate federal matching funds. The Urban Institute has described such financing strategies as common but controversial among policymakers.
Service and Provider Exclusions
Federal funds can no longer be used for gender transition procedures under Medicaid or CHIP, even in states that currently allow such coverage. The bill also prohibits Medicaid payments to clinics providing abortions beyond Hyde Amendment exceptions if they receive over $1 million annually in Medicaid funding. This policy is targeted toward large providers like Planned Parenthood. These exclusions affect current Medicaid beneficiaries in states where such services were previously covered and may limit access to broader reproductive and preventive health care services.
Projected Impact and Final Outlook
The CBO estimates H.R.1 would reduce federal Medicaid spending by approximately $863 billion and SNAP spending by $295 billion over the next ten years. These reductions are expected to result in significant declines in program participation and benefit levels. Medicaid enrollment could decline by over 10 million individuals, and SNAP enrollment by 3 to 4 million, due primarily to eligibility tightening rather than fraud prevention.
While proponents argue the bill promotes fiscal responsibility and personal accountability, neutral analysis shows that much of the projected savings arise from reduced access to programs that millions of Americans currently rely on. The long-term effects on food security, health outcomes, and administrative burden at the state level remain critical questions as the legislation moves forward.
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