Governors confront the next phase of Medicaid and SNAP changes
Governors and state agencies are moving from planning to implementation on major changes to Medicaid and the Supplemental Nutrition Assistance Program, or SNAP.
CMS says states must begin conditioning Medicaid eligibility for certain adults on community engagement beginning January 1, 2027, unless a state starts sooner. The underlying law describes the Medicaid provision as effective December 31, 2026. At the same time, an enacted federal law is reducing the federal share of allowable SNAP administrative costs from 50% to 25% beginning in fiscal year 2027. States with high SNAP payment-error rates may also become responsible for part of their benefit costs, generally beginning around October 1, 2027.
The changes are forcing states to weigh technology upgrades, caseworker staffing, outreach, verification procedures and budget requests. The National Governors Association said state policy advisers are reporting shared concerns about Medicaid implementation, SNAP administration and the financial exposure created by payment errors.
Who could face the Medicaid requirement
The Medicaid rule does not apply to every enrollee. It targets certain nonpregnant, nondisabled adults ages 19 through 64 who are enrolled or applying through the Affordable Care Act Medicaid expansion pathway or specified waiver coverage.
Those individuals generally must complete at least 80 hours per month of qualifying activity. Activities can include work, participation in a work program, community service or enrollment in an education program at least half time. The law and federal guidance provide mandatory exemptions and hardship provisions, while some procedures will depend on federal guidance and state implementation choices.
For new applicants, states may require proof of qualifying activity for one month before application, or up to three consecutive months at state option. Existing enrollees may have to demonstrate compliance as a condition of continued coverage. CMS’s public implementation page uses January 1, 2027; the Congressional Research Service describes the statutory effective date as December 31, 2026, or sooner at state option.
The work ahead for state Medicaid agencies
CMS says the requirement will require major system, policy and operational changes. States will need ways to verify qualifying activity, accept and review documentation, send notices, report compliance and communicate exemptions and deadlines. Federal law also requires advance outreach to people who may be subject to the requirement.
That work may require changes to eligibility systems, call centers, online portals and contracts with workforce or community-service providers. It also may increase demand for caseworkers and outreach, particularly when people have irregular work schedules, limited internet access or difficulty obtaining records.
States are not all following the same path. Associated Press reported that Nebraska Gov. Jim Pillen announced an earlier launch, while Missouri officials requested about $33 million for technology improvements and more than $12 million for the equivalent of about 120 additional positions. Those are state-specific examples, not a national cost estimate.
SNAP costs are arriving on a different timetable
SNAP’s work-rule changes and Medicaid’s community-engagement requirement do not share the same effective date. The Congressional Research Service says the new SNAP provisions were effective upon enactment, with USDA guidance requiring state implementation by November 2, 2025. The Medicaid community-engagement provision takes effect at the end of 2026, or sooner if a state chooses.
SNAP’s administrative-cost shift is also moving through a separate rulemaking process. USDA’s June 24 proposed rule would codify an enacted statutory change reducing the federal share of allowable state administrative costs from 50% to 25% beginning in fiscal year 2027. The rule remains proposed, and comments are due August 24, 2026. SNAP Employment and Training administrative costs and related participant reimbursements remain subject to separate 50% reimbursement rules under the proposal.
USDA also reported a national SNAP payment-error rate of 10.62% for fiscal year 2025, above the 6% threshold in the 2025 law. Under the new framework, states at or above the threshold may have to match 5%, 10% or 15% of their states’ benefits, depending on the error rate. USDA says that financial responsibility will generally begin as soon as October 1, 2027, and that states may use their fiscal year 2025 or 2026 error rate for the first year.
A payment error is not the same as fraud. USDA says the measure tracks how accurately states determine eligibility and benefit amounts and includes both overpayments and underpayments. Errors can result from inaccurate calculations, missed household updates, procedural mistakes or other largely unintentional problems involving the state agency or a household.
What households should watch
People receiving both Medicaid and SNAP may encounter overlapping but different rules. Both programs use an 80-hour standard in some circumstances, but their covered populations, exemptions, qualifying activities, reporting requirements and effective dates are not identical. The Congressional Research Service estimates that some people in the potentially affected groups receive both programs, while many receive only one.
The next practical signals will be state budget requests, agency notices, CMS implementation materials, USDA’s final administrative-cost rule and state-specific payment-error data. For households, the most important question will be how their state defines documentation, exemptions and deadlines—and whether agencies have enough staff and system capacity to process those decisions accurately.
Sources
- CMS/Medicaid.gov community-engagement implementation page
- USDA proposed SNAP administrative-cost rule
- Congressional Research Service comparison of Medicaid and SNAP work rules
- National Governors Association 2026 HHS Policy Advisors Institute
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