H.R. 1 reshapes Medicaid, SNAP administration for counties

Key Takeaways

NACo legislative staff shared how SNAP and Medicaid reform implementation following H.R. 1, which includes changes to eligibility, financing and administrative requirements, will affect counties, in a Feb. 22 workshop at the NACo Legislative Conference. 

H.R. 1 is one of the most significant restructurings of the healthcare safety net program in recent years, and the changes will shape both how counties administer programs and how they plan for the future, noted Hennepin County, Minn. Chair Irene Fernando. 

“We are aware that there are many paths that people find themselves in,” Fernando said. “The path that we share, the moment that we share, is that we care for our residents deeply. We need sustainable systems in order to advance our shared goals, and all of our futures are entwined in a different kind of way, because of the effects of H.R. 1.”

Medicaid

Shifts to cost-sharing requirements, retroactive coverage, error rate enforcement and work requirements for Medicaid outlined in H.R. 1 will affect counties and their budgets, according to Blaire Bryant, NACo legislative director for Health. 

Individuals enrolled in Medicaid and in the expansion population, meaning their income is up to 138% of the Federal Poverty Level, will now have to pay essentially a co-pay of up to $35 for services provided under Medicaid, with exceptions, some of which include primary care, mental health and substance use disorder services. Washington, D.C. and 40 states have adopted and implemented Medicaid expansion.

H.R. 1 also reduces retroactive coverage from three months down to two months, and down to one month for the Medicaid expansion population. Medicaid retroactive coverage allows patients to cover medical bills for a period prior to their application, if they meet all eligibility requirements during that period. There is federal funding attached to the provision for implementation, which is a positive, Bryant noted. 

The U.S. Department of Health and Human Services (HHS) reserves the right to pull back Medicaid funding if a state has an error rate of 3% or higher, which will remain the case, but H.R. 1 expands the definition of an error rate to include cases with insufficient documentation, according to Bryant. 

“Basically, they’re trying to recoup money for eligibility errors based off the state,” Bryant said. “So, we have a lot less flexibility when it comes to making errors in terms of eligibility verification in Medicaid.” 

Counties need to assess their resources, fiscal impacts on health systems and data and information and technology infrastructure needs ahead of implementation, Bryant noted. 

“You must also be aligning your data IT infrastructure with your states,” he said. 
“Because there’s going to be a lot of state, county and federal reporting, so just making sure all those data systems can work together is going to be a key priority.”

HHS is set to release full formal guidance around implementing work requirements in June, which will apply to adults ages 19 to 64 in states with Medicaid expansion. 

“Which is a bit of a tight timeline, seeing as work requirements are being implemented January 1 of next year, essentially,” Bryant said. “So, some states have already done the planning process and putting systems in place to fulfill that requirement.”

Individuals in non-expansion states who have a Section 1115 demonstration waiver can still be subject to submitting work requirements, she said. 

“When this first came out, non-expansion states were like ‘Phew, we don’t have to do that,’” Bryant said. “But do take a look at your waivers and see if you are meeting the requirements for covering expansion populations, so that you can fulfill the work requirement requirements under H.R. 1 with that population.”

Numerous groups are excluded from work requirements, including former foster youth, American Indians and Alaska Natives and individuals with significant medical needs. Notably, individuals who follow TANF and SNAP work requirements will not have to submit separate work requirements for Medicaid, she noted. 

“We’re happy to see this,” Bryant said. “Because one of our biggest goals with implementation is streamlining requirements between Medicaid and SNAP, so it's less confusing to implement.”

States need to verify work requirements a minimum of twice each year but can grant beneficiaries the flexibility in which months they meet the requirement between rules, according to Bryant. 

“If an individual says, ‘I can't work this month, but that month I'll be working because I'll have more hours,’ states have the ability to grant that for that individual,” she said. 

SNAP

Counties in 10 states are responsible for administering benefits for the Supplemental Nutrition Assistance Program (SNAP), the largest food assistance program in the country. The federal government has historically covered 50% of the administrative cost of SNAP benefits, but H.R. 1 decreases that federal share to 25%, meaning that states and counties will now have to take on 75% of the administrative costs of the program, said Emma Conover, NACo’s associate legislative director for Human Services and Education.

Benefit cost share is another new feature of the SNAP program under H.R. 1 that dictates that states will have to pay in accordance with the error rate that has been calculated by the U.S. Department of Agriculture, she said.

States with payment error rates above 6% will pay cost share that covers anywhere in between 5% to 15% of benefits. Cost shifts for payment errors occurs for both over- and underpayment, Conover noted. 

“If your state distributes $2 billion worth of benefits and they have an 8.5% error rate,” she said. “They would be responsible for paying $200 million of the benefits that were originally administered by the federal government.”