Major Medicaid Legislation: OBBBA Summary

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA/OBBB/BBB) into law. The House initially passed this legislation on May 22 by a 215-214 vote, and the Senate passed it with an amendment by a 51-50 vote. The amended bill passed the House by a 218-214 vote on July 3. This budget package will have sweeping impacts across Medicaid, Medicare, the Affordable Care Act (ACA), food nutrition programs, and more.

The bill includes provisions that states must meet to maintain federal matching funds for the Medicaid program, as well as more strict criteria beneficiaries must meet to qualify for and maintain enrollment in government funded health care program, with the majority of the new restriction on states’ funding sources applying only to states that have adopted Medicaid expansion under the ACA. The Congressional Budget Office (CBO) estimates that by 2034, the Medicaid-related provisions will result in $990.1 billion in federal savings and the ACA-related provisions will result in $213 billion in federal savings.

The CBO estimates ten million uninsured people will still lose coverage due to changes to Medicaid and the ACA. This is down from the 11.8 million people that were projected to lose coverage under earlier versions of the legislation. This difference is primarily due to a provision that would have cut federal payments to states covering undocumented immigrants, which was found to violate Senate rules and thus dropped from the final bill. The final law does not address the enhanced ACA subsidies that help people afford premiums and are expiring at the end of this year; if Congress does not act, an additional 4.2 million people will lose insurance coverage.

Health care provisions begin at Sec. 7110 on page 219 of the adopted bill and include:

• Community engagement (work, volunteer, or education) requirements for certain Medicaid enrollees.

• Stricter eligibility checks and more frequent redeterminations for Medicaid expansion enrollees. 

• Caps on Medicaid state-directed payments and limits on provider taxes. 

• $50 billion in funding to support rural health transformation plans. 

• Reforms to ACA premium tax credits.

• Ending automatic reenrollment for subsidy-eligible consumers.

• Eliminating access to premium tax credits for those using certain special enrollment periods. 

• Making direct primary care arrangements compatible with Health Savings Accounts (HSAs). 

• A moratorium on several new regulations related to Medicaid, Medicare, and CHIP.

• Changes to Medicare, including the physician fee schedule, orphan drug exclusions, and non-citizen coverage and Part D PBM rules.

The law also makes significant changes to Nutrition and the Supplemental Nutrition Assistance Program (SNAP) that shifts costs to the states and reduces federal funding. The CBO estimates that the nutrition- and SNAP-related provisions will result in $186.65 billion in federal savings during the time frame of 2025-2034. States may face challenges in covering increased administrative or benefit costs, leading to potential cuts in SNAP benefits, stricter eligibility requirements, or even state-level program cuts.

Many of the provisions will require additional rulemaking and direction from the U.S. Department of Health and Human Services (HHS) and implementation will vary by state based on their specific systems, policies, and programs. Timelines could shift based on implementation, waivers, and guidance from HHS. Individual states will need to assess the direct impact on their budgets, policies, etc. We will continue to update this post as new incormation becomes available.

Provisions Impacting Medicaid and CHIP

Section	Description	Impact/Notes	Effective Date
Section 71103. Reducing Duplicate Enrollment Under the Medicaid and CHIP Programs.	Requires states to cross-check beneficiary information with other state and federal data systems, regularly verify death records, and establish processes to obtain and verify beneficiary address information. Establishes a nationwide eligibility system for states to provide information to and check against. MCOs must provide address information to state.	Most states already proactively conduct data matches to determine address changes, but this potentially changes the frequency and processes. States will need to implement verification processes as required by the statute and future rules, update managed care contracts to address requirements, and update verification systems, including potentially creating interoperability with the federal database or adopting new technology and staff to implement these new requirements. The CBO estimates this provision will result in $17.4 million in federal savings during the time frame of 2025-2034.	The national database must be in place by October 2029. Collection of SSN and other information is also effective on the same date. The requirements for MCOs to share data is effective January 1, 2027
Sec 71104. Ensuring Deceased Individuals Do Not Remain Enrolled.	Requires States to routinely (no less than quarterly) verify death records and remove deceased individuals and providers from enrollment rolls. States must review the Death Master File created in 2013 Bipartisan Budget Act. If an individual is erroneously removed, the State must reinstate their enrollment retroactive to the disenrollment. This codifies existing regulations in place.	Texas already has processes to check against SSA and other data for deaths and a process to remove from files – see here.	Requires verification requirements be implemented by January 1, 2027
Sec 71105. Ensuring Deceased Providers Do Not Remain Enrolled.	Requires provider enrollment or revalidation include a screening of a provider against the Death Master File.	This codifies existing regulations in place. Texas HHSC and TMHP (provider enrollment contractor) already use this practice	Requires verification requirements be implemented by January 1, 2028
Sec 71106. Payment Reduction Related to Certain Erroneous Excess Payments Under Medicaid.	Expands the government's ability to recoup federal funds from states that have made erroneous excess payments under the Medicaid program by expanding the definition of "erroneous excess payments" to include payments made on behalf of individuals where there is insufficient information to confirm eligibility.	This change may result in additional federal recoupments and affect state cost-sharing levels. This change could also result in additional provider recoupments. The CBO estimates this provision will result in approximately $8 billion in federal savings during the time frame of 2025-2034.	This change is effective October 1, 2030
Sec 71107. Eligibility Redeterminations.	Changes the frequency of eligibility redeterminations to once every 6 months for the Medicaid expansion population. All other populations (MAGI and non-MAGI) will continue to have their eligibility reviewed and renewed at least every 12 months.	The CBO estimates this provision will result in over $62.5 billion in federal savings during the time frame of 2025-2034. Texas did not expand Medicaid so this provision should not have an impact. The following states have not expanded Medicaid: Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming.	This provision is effective for expansion states for renewals scheduled on or after December 31, 2026. The bill requires the Secretary to issue guidance within 180 days of enactment.
Sec 71108. Home Equity Limits for Determinizing Eligibility for LTSS.	Addresses the home equity limits for Medicaid enrollees need long-term care (LTC) or nursing facility services under the Medicaid program.	The CBO estimates this provision will result in $195 million in federal savings during the time frame of 2025-2034.	This provision is effective January 1, 2028.
Sec 71109. Alien Medicaid Eligibility	Narrows the definition of qualified immigrants for purposes of Medicaid or CHIP eligibility to LPRs, certain Cuban and Haitian immigrants, citizens of the Freely Associated States lawfully residing in the US, and lawfully residing children and pregnant adults in states that cover them under the ICHIA option.	The CBO estimates this provision will result in $6 billion in federal savings during the time frame of 2025-2034. Does not impact Texas. According to Kaiser, there are 14 states (CA, CO, CT, IL, MA, ME, NJ, NY, OR, RI, UT, VT) and DC that offer coverage for people regardless of immigrations status that could result in shifting $92 billion in costs to the state of the next ten years.	October 1, 2026.
Section 71110. Expansion FMAP for Emergency Medicaid	Eliminates the enhanced federal matching rate (FMAP) for emergency Medicaid services provided to certain non-citizens authorized under the ACA.	The CBO estimates this provision will result in $28 billion in federal savings during the time frame of 2025-2034. Texas is not an expansion state, so no impact expected. Expansion states will no longer receive the higher 90% FMAP for emergency care furnished to immigrants who would qualify for Medicaid expansion if not for their immigration status and will instead receive their regular state FMAP for these services.	October 1, 2026.
Sec. 71112. Reducing State Medicaid Costs.	Limits retroactive coverage to one month prior to application for coverage for expansion enrollees and two months prior to application for coverage for traditional enrollees.  Under current law, states are required to provide Medicaid coverage for qualified medical expenses incurred up to 90 days prior to the date of application for coverage.	The CBO estimates this provision will result in $4 billion in federal savings during the time frame of 2025-2034. A shorter retroactive coverage period means individuals may have less time to apply for coverage and have their medical bills covered retroactively, potentially leading to increased medical debt and reduced access to care, especially for those with unpredictable or delayed enrollment. Hospitals, FQHCs, and other providers might face higher levels of uncompensated care as patients may be unable to secure coverage for services provided during periods preceding the shortened retroactive coverage window. This provision was a long-standing safety net designed to protect patients from catastrophic medical debt and ensure providers receive reimbursement.	January 1, 2027.
Sec 71113. Federal Payments to Prohibited Entities	Prohibits Medicaid funds to be paid to providers that are nonprofit organizations, essential community providers primarily engaged in family planning services or reproductive services, provide for abortions outside of the Hyde exceptions and received $800,000 or more in payments from Medicaid in 2024.	This provision is aimed at Planned Parenthood and other community providers. Federal law already prohibited using Medicaid funds to pay for abortions and this provision expands to other medical services.  Texas has already removed abortion providers and affiliates out of Medicaid and the Healthy Texas Women’s Program so does not have an impact on Texas.	Changes effective upon enactment for one year.
Sec 71114. Sunsetting Increased FMAP Incentive	Removes the temporary 5% enhanced FMAP for states that newly expanded Medicaid, as established under the American Rescue Plan Act (ARPA).	The CBO estimates this provision will result in close to $14 billion in federal savings during the time frame of 2025-2034. Missouri, Oklahoma, South Dakota, and North Dakota expanded Medicaid after the incentive was put in place.	This would apply on a prospective basis; any state must begin expanding funding for the expansion population prior to January 1, 2026, to receive the enhancement.
Sec 71115. Provider Taxes.	Prohibits states from establishing any new provider taxes for all states for two years and reduces the allowable level of provider taxes for expansion states by 0.5% each year until it reaches 3.5% in FY 2032. Includes an exemption for nursing facilities and intermediate care facility services. This provision overlaps with a proposed rule released May 12, 2025.	The CBO estimates this provision will result in $191 billion in federal savings during the time frame of 2025-2034.  22 states are expected to have to reduce their provider taxes on either hospitals or MCOs – AZ, CO, CT, IL, IN, IA, LA, MI, MN, MO, NV, NH, NJ, NY, OK, OR, PA, RI, UT, VT, VA.	Effective upon enactment, but states may have at most 3 fiscal years to transition existing arrangements that are no longer permissible. State may not enact new provider classes after July 4, 2025, and have those taxes remain in place after October 1, 2026.
Sec 71116. State Directed Payments.	Limits state directed payments to 110% of the “Total published Medicare payment rate” for non-expansion states and 100% for expansion states. For states that newly expand Medicaid, all state directed payments will be subject to this provision, even if previously approved. Existing SDP limits would be reduced by 10% annually to reach the Medicaid allowable rate. The bill grandfathers SDPs that have been approved (or good faith effort sought) prior to enactment of the bill for rural hospitals and prior to May 1, 2025, for all other providers. For grandfathered programs, the reduction in payment limits would not begin until the Jan. 1, 2028, rating period.	The CBO estimates this provision will result in $149.4 billion in federal savings during the time frame of 2025-2034 .This provision could have an impact on Texas starting January 1, 2028 but HHSC will need to provide an impact analysis. Note that while the language is assumed to protect Texas’ programs from any changes until Jan. 1, 2028, these programs require annual approval and HHSC is still waiting on approval for State Fiscal Year 2026 (begins September 2025). The Commonwealth Fund estimated reductions in Medicaid payments to hospitals if state directed payments were limited to 100% of Medicare rates – see analysis here. Based on this analysis Texas would see a 24% reduction in payments. THA states that the grandfather clause preserved billions in funding until 2028. THA also finds that if Texas must reduce to Medicare rates it would result in $2.4 billion loss to Texas Medicaid ($1.4 billion net loss to hospitals). The legislation and regulations do not expand on or provide any specific calculation or methodology. There are thoughts that CMS may use this as an opportunity to revise the regulations to provide a more detailed definition.	Grandfathers SDPs that have been approved (or good faith effort sought) prior to enactment of the bill for rural hospitals and prior to May 1, 2025 for all other providers. For grandfathered programs, the reduction in payment limits would not begin until the Jan. 1, 2028, rating period when all grandfathered SDPs will begin a phase down of 10% per year until the total payment rate reaches 110% Medicare for non expansion states, 100% Medicare for expansion states.
Section 71117. Waiver of Uniform Tax Requirement for Medicaid Provider Tax.	Federal rules specify provider taxes must be broad-based and uniform (i.e., states cannot limit provider taxes to only Medicaid providers) and may not hold providers harmless by guaranteeing they receive their funds back. The hold harmless requirement does not apply when tax revenues comprise 6% or less of providers' net patient revenues from treating patients (referred to as the “safe harbor” limit). This provision modifies the criteria used to deem a health care-related tax not generally redistributive, which prevents it from qualifying for a waiver of uniformity and broad-based provider tax requirements.	The CBO estimates this provision will result in $34.6 billion in federal savings during the time frame of 2025-2034. Not all of Texas’ Local Provider Participation Funds (LPPFs), used to help finance the State’s share of Medicaid supplemental and directed payment programs are at 6%, meaning if they fail to meet the new redistributive criteria the State may need to adjust its provider tax programs to comply with the new federal law and draft rules. HHSC will need to estimate the actual impact to Texas. This could have significant financial implications for state budgets, potentially requiring states to find alternative funding sources or consider cuts to Medicaid benefits or services if they cannot maintain current federal funding levels. This could have significant financial implications on State budgets, potentially requiring States to find alternative funding sources or consider cuts to Medicaid benefits or services if they cannot maintain current federal funding levels.	Effective on the date of enactment subject to any transition period determined by HHS (not to exceed 3 fiscal years).
Sec 71118. Section 1115 Demonstration Projects Budget Neutrality.	Codifies and formalizes the existing practice of requiring budget neutrality for states seeking to implement innovative Medicaid programs through Section 1115 demonstration waivers. This section specifies that the Chief Actuary for CMS (rather than the HHS Secretary) must certify 1115 waivers are not expected to result in an increase in federal expenditures compared to federal expenditures without the waiver.	The CBO estimates this provision will result in $3 billion in federal savings during the time frame of 2025-2034.	Applies to approvals, renewals or amendments beginning January 1, 2027.
Section 71119. Increasing Personal Accountability Through Community Engagement Requirements.	Requires states to implement work or community engagement requirements for able-bodied adults who are between 19 and 64 and are not pregnant, not enrolled in Medicare, and are not otherwise exempt.	The CBO estimates this provision will result in $325.6 billion in federal savings during the time frame of 2025-2034. This should not have an impact on Texas but could create major operational challenges in states that have expanded Medicaid or cover populations subject to the requirements.	States are required to implement these requirements, effective January 1, 2027.
Sec 71120. Modifying Cost Sharing Requirements for Certain Expansion Individuals Under the Medicaid Program.	Requires states to impose cost sharing of up to $35 per service on expansion adults with incomes 100-138% FPL. Exempts services including primary care, mental health, substance use disorder, and services provided by FQHCs, CCBHCs, or rural health clinics. Allows providers to waive cost sharing on a case-by-case basis or deny services if cost sharing not paid.	The CBO estimates this provision will result in $7 billion in federal savings during the time frame of 2025-2034. This will not impact Texas because the state has not expanded Medicaid but could have cost implications for Medicaid expansion enrollees with higher health care needs and require changes in Medicaid expansion states not applying cost sharing at these levels.	October 1, 2028
Section 71121. Making Certain Adjustments to Coverage of Home or Community-Based Services Under Medicaid.	Allows HHS to approve state waivers for HCBS that don't require the recipient to meet the existing criteria of needing an institutional level of care	This could expand access to HCBS for individuals who may not have qualified under previous rules, if states decide to apply, but it could also face challenges with funding limitations.	New waivers may not be approved until July 1, 2028.
Medicare Provisions
Section 71201. Limiting Medicare Coverage of Certain Individuals	Limits Medicare coverage to a US citizen or national, or to an immigrant in one of the following categories: lawfully admitted for permanent residence; granted status as a Cuban and Haitian entrant; or lawful US resident in accordance with a Compact of Free Association.		January 1, 2027
Section 71202. Temporary Payment Increase Under the Medicare Physician Fee Schedule	Provides a temporary 2.5% increase to the Medicare Physician Fee Schedule for 2026. This increase is intended to address "exceptional circumstances”.
Section 71203. Expanding and Clarifying the Exclusion for Orphan Drugs Under the Drug Price Negotiation Program.	The Inflation Reduction Act (IRA) already included an exclusion for orphan drugs used for a single rare disease. This provision extends this exclusion to drugs that treat multiple rare diseases. It also revises the start of the timeline under which a manufacturer is eligible for negotiation to begin when an orphan drug receives its first non-orphan indication.	This expansion is intended to further encourage pharmaceutical companies to invest in research and development of drugs for rare diseases, even if those drugs have broader applications. The expanded exclusion means that more orphan drugs will be shielded from price negotiations, potentially allowing manufacturers to maintain higher prices for these medications.	Applies to initial price applicability years beginning on or after January 1, 2028.
Moratoriums on Recent Medicaid, Medicare, and CHIP Rules
Sec 71101. Moratorium on Rule Relating to Streamlining Medicaid and Medicare Savings Program Eligibility	Enacts a moratorium through September 30, 2034, on implementing certain provisions in the “Streamlining Medicaid; Medicare Savings Program Eligibility Determination and Enrollment”. See full analysis for details but includes provisions related to general reenrollment periods, streamlining enrollment processes, usage of LIS lead data,	CBO estimated a savings of $66 billion over ten years (2025 – 2034). CMS estimated these rule changes would have resulted in nearly 1 million more people enrolled in an MSP by 2029.	Enacts a moratorium through September 30, 2034, on implementing specific provisions of the final rule effective November 17, 2023
Sec 71102. Moratorium on Implementation of Rule Relating to Eligibility and Enrollment for Medicaid, CHIP and the Basic Health Program.	Enacts a Moratorium on implementation or enforcement through September 30, 2034 of provisions adopted in the final rule published by CMS Services on April 2, 2024, titled ‘‘Medicaid Program; Streamlining the Medicaid, Children’s Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes’’. Provisions include alignment of MAGI, non-MAGI and CHIP enrollment policies, includes requirements to combine eligibility notices and streamline processes between Medicaid, CHIP, and Exchange coverage.	CBO estimates savings of $55.8 billion over ten years (2025-2034) in Medicaid and CHIP programs.  CMS estimated that 860,000 individuals would newly enroll in Medicaid and related programs due to the streamlined processes and reduced barriers.	Enacts a Moratorium on implementation or enforcement through September 30, 2034 of provisions adopted in the final rule published by CMS Services on April 2, 2024.
Sec. 71103. Moratorium on Implementation of Rule Relating to Staffing Standards for LTC Facilities Under the Medicare and Medicaid Programs.	This provision prohibits the implementation or enforcement of certain amendments made by the final rule published ‘‘Medicare and Medicaid Programs; Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting’’. This rule established minimum staffing standards for long-term care facilities, as part of the Biden-Harris Administration's nursing home reform initiative.	The CBO estimates this provision will result in $17.4 billion in federal savings during the time frame of 2025-2034.	This moratorium prevents HHSC from enforcement of new staffing requirements until at least 2034.
Affordable Care Act Related Provisions
Section 71301. Permitting Premium Tax Credit Only for Certain Individuals. Limits premium tax credits (PTCs) to U.S. citizens and lawful residents.	Limits premium tax credit eligibility for lawfully present immigrants to only a category of “eligible alien,” which is defined as: an individual who is an alien who is lawfully admitted for permanent residence under the Immigration and Nationality Act; an alien granted the status of Cuban and Haitian entrant; or an individual who lawfully resides in the U.S. in accordance with a Compact of Free Association. Also disallows premium tax credits during periods when an individual is ineligible for Medicaid due to their immigration status. This essentially means that if an individual's immigration status prevents them from qualifying for Medicaid, they will also be ineligible for PTCs.	The CBO estimates this provision will result in $69.8 billion in federal savings during the time frame of 2025-2034.	Plan years beginning on or after January 1, 2027
Section 71303. Requiring Verification of Eligibility for Premium Tax Credit	Requires that household income, immigration status, health coverage status, place of residence, family size, and any other information that the Secretary deems necessary are verified before coverage. The law permits exchanges to use any third-party sources and any available data for verification and allows waiving of verification requirements for individuals enrolling during SEPs due to changes in family size.	This provision effectively ends auto-renewals. The CBO estimates this provision will result in $36.9 billion in federal savings during the time frame of 2025-2034.	Applies to taxable years beginning after December 31, 2027.
Section 71304. Disallowing Premium Tax Credit in Case of Certain Coverage Enrolled During Special Enrollment Period.	This provision aims to restrict access to premium tax credits for individuals who enroll outside of the standard open enrollment period, with some exceptions.	The CBO estimates this provision will result in $39.5 billion in federal savings during the time frame of 2025-2034. This provision could significantly impact individuals who experience qualifying life events and rely on premium tax credits to afford insurance coverage.	Plan years beginning after December 31, 2025
Section 71305. Eliminating Limitation on Recapture of Advance Payment of Premium Tax Credit.	Removes the limitation on the IRS's ability to recapture excess advance premium tax credit payments during tax reconciliation, regardless of income. Currently there is a repayment cap that varies based on household income.	The CBO estimates this provision will result in $17.3 billion in federal savings during the time frame of 2025-2034. This means that taxpayers who received advance premium tax credits based on estimated income, but whose actual income was higher than estimated, may be required to repay a larger portion or even all of the excess credits they received.	Taxable years beginning after December 31, 2025.
Section 71306. Permanent Extension of Safe Harbor for Absence of Deductible for Telehealth Services.	Permanently extends the telehealth safe harbor, allowing high-deductible health plans (HDHPs) to cover telehealth services without a deductible, ensuring HSA eligibility	This means individuals with HDHPs can access telehealth services before meeting their deductible without jeopardizing their HSA eligibility.	The extension is retroactive, applying to plan years beginning after December 31, 2024, effectively closing the gap created when a previous temporary extension expired at the end of 2024.
Section 71307. Allowance of Bronze and Catastrophic Plans in Connection with Health Savings Accounts	Expands access to Health Savings Accounts (HSAs) by treating all Bronze and Catastrophic health plans offered through the Exchange as High Deductible Health Plans (HDHPs).  This means individuals enrolled in these plans can now also contribute to an HSA.	This change expands HSA access to a broader range of individuals and potentially encourages greater participation in both Bronze or Catastrophic plans and HSAs.	This change is effective for plan years beginning on or after January 1, 2026
Section 71308. Treatment of Direct Primary Care Service Arrangements.	Addresses the treatment of Direct Primary Care (DPC) service arrangements and ensures that participation in DPC arrangements does not disqualify individuals from using HSAs	Could increase individuals participating in DPC arrangements.	This provision of the bill is effective beginning January 1, 2026.
Rural Health Transformation Program
Section 71401. Rural Health Transformation Program	Includes a Rural Health Transformation Program that allocates $50 billion over five years (2026-2030) to improve healthcare access and outcomes in rural areas.		States must submit their applications by December 31, 2025. CMS must approve or deny all applications by the same deadline (December 31, 2025).
Nutrition and Supplemental Nutrition Assistance Program (SNAP) Reforms
Sec. 10101. Re-evaluation of the Thrifty Food Plan	Redefines the program by tying it to a specific adult male and female (age 20-50) and two children (ages 6-8 and 9-11) reference family. It also requires cost neutrality for future reevaluations of the TFP’s market baskets starting no sooner than Oct. 1, 2028, and at five-year intervals after that.	The CBO estimates this provision will result in $37.3 billion in federal savings during the time frame of 2025-2034. The cost neutrality requirement will limit the ability of the USDA to make substantive changes based on factors like evolving dietary guidelines or changing consumption patterns, even if data suggests a need.  By restricting future adjustments to the Thrifty Food Plan, will result in cuts to SNAP benefits as well as levels for The Emergency Food Assistance Program, SUN Bucks/Summer EBT benefits, and the Nutrition Assistance Program block grant to Puerto Rico.	Effective upon enactment.
Sec. 10102. Modifications to SNAP Work Requirements for Able-Bodied Adults	Expands the rules about who must meet work requirements to keep their SNAP benefits. The bill also changes the waiver requirements. New age limits:  Able-bodied adults ages 55 through 64 without dependent children and parents of children 14 and older.  Parents whose youngest dependent child is 14 or older must now meet work requirements—although kids will keep getting benefits even if their caretakers lose them. Veterans, people experiencing homelessness, and former foster youth must now meet work requirements	The CBO estimates this provision will result in $68.6 billion in federal savings during the time frame of 2025-2034. Feeding Texas estimates this will impact 275,000 Texans.	Effective upon enactment.
SEC. 10105. Matching Funds Requirements	Requires states to contribute a percentage of the cost of SNAP benefits based on their payment error rate beginning in FY 2028 (October 2027).	The CBO estimates this provision will result in $40.8 billion in federal savings during the time frame of 2025-2034. As of 2024, 44 states had error rates at or above 6%. Texas will set its 2027-2028 budget during the 90th Legislative session which begins January 1, 2027, and will need to make decisions about SNAP financing and eligibility requirements. Texas 2024 error payment rate was 8.32 which if the law was in effect in 2024 would have resulted in the state paying a 10 percent share. Feeding Texas estimates this will result in $716 million per year.	These changes begin in Federal Fiscal Year 2028 (which begins on October 1, 2027) if state payment error rate exceeds 6% - see 2024 error rates here for reference. As of 2024, 44 states had error rates at or above 6%.
Sec. 10106. Administrative Cost Sharing.	The bill shifts the cost-sharing burden for SNAP administration from a 50/50 federal/state split to a 75/25 split, requiring states to cover 75% of administrative costs starting in federal fiscal year 2027 (beginning October 2026).	The CBO estimates this provision will result in $24.7 billion in federal savings during the time frame of 2025-2034. Feeding Texas estimates this will have an $89.5 million per year impact. The 89th Legislature passed the budget for 2026-2027 which goes through August 2027 and does not include assumptions associated with this 25% increase in state matching funds that is effective October 2026. HHSC has indicated they will use a funding strategy that borrows from the Medicaid strategy and then adds borrowed funds back to Medicaid via a supplemental funding bill.	October 1, 2026
Section 10107. The National Education and Obesity Prevention Grant Program	Administered by the USDA's Food and Nutrition Service (FNS), SNAP-Ed provides funding to states and local organizations to implement evidence-based nutrition education and obesity prevention programs. This provision eliminates SNAP-Ed.	The CBO estimates this provision will result in $5.5 billion in federal savings during the time frame of 2025-2034. Feeding Texas indicates that this program provides nutrition education to thousands of Texas families and funds 16 Texas organizations and brings in $25 million per year to Texas to support nutrition education.	Effective date in the bill is October 1, 2025.
Section 10108. Eligibility SNAP for Non-Citizens.	Removes access to SNAP for refugees and asylum seekers, while also adding access for certain entrants from Cuba and Haiti, and U.S. residents who live in Marshall Islands, Federated States of Micronesia & Palau.	The CBO estimates this provision will result in $1.9 billion in federal savings during the time frame of 2025-2034. Feeding Texas estimates this will impact 25,000 individuals benefits in Texas.	Effective upon enactment.