What the July 2025 Tax and Spending Law Did to Medicaid and SNAP

In the summer of 2018, Arkansas became the first state to make adults in its Medicaid expansion report their work hours every month to keep their health coverage. The reporting had to be done online, through a state website that shut down overnight, in a state where many low-income residents had no home internet. Within a few months, about 18,000 people had lost coverage. Researchers who studied the program afterward found that most of the people cut off were already working or should have qualified for an exemption; they simply had not managed the paperwork. A federal judge halted the program in 2019. Seven years later, on July 4, 2025, President Trump signed a law that takes the Arkansas idea national. It also shifts costs for food assistance onto the states, narrows who can get help and changes how often people must prove they still qualify. The details are dense, and the dates are spread across several years, which is exactly why they are easy to miss until they arrive.

In short: The July 2025 tax and spending law extended the 2017 tax cuts and paid for part of the cost with deep reductions in projected Medicaid and SNAP spending. For Medicaid, it requires many adults in the expansion group to show work or other activity, requires eligibility checks every six months and limits how states finance their share. For SNAP, it expands work requirements to older adults and parents of teenagers and makes states pay part of benefit costs starting in 2027 and 2028. Many changes take effect in late 2026 or later, so there is still time to prepare and to press for changes.

The bargain behind the bill

The law bundled several things together. Its centerpiece was making permanent the individual income tax cuts from 2017, which were set to expire after 2025, along with new tax breaks, including deductions for tips and overtime pay and a larger deduction for older taxpayers. To offset part of the cost and meet budget rules, Republican leaders turned to the two largest programs that serve people with low incomes.

The Congressional Budget Office estimated that the law's health provisions would increase the number of people without health insurance by about 10 million in 2034. Reductions in federal SNAP spending were also large. The law passed the House and Senate without Democratic votes, and the Senate needed Vice President JD Vance to break a tie.

Supporters made a straightforward case. They argued that Medicaid had grown far beyond its original purpose, that able-bodied adults without children should be expected to work, train or volunteer in return for public benefits, and that states had used accounting tricks to draw down more federal money than they put in. They also argued that making states share SNAP costs would give them a reason to reduce payment errors. Those arguments are worth taking seriously, and the sections below explain what each provision does and where the evidence points.

What follows is general information about the law as written. Rules are implemented by federal agencies and states, and they can change. For your own situation, check with your state Medicaid or SNAP office, Medicaid.gov or the USDA's Food and Nutrition Service.

Medicaid: the work requirement

The most visible change is a new requirement, called community engagement in the law, for adults in the Medicaid expansion group, people ages 19 to 64 who qualify based on income under the Affordable Care Act expansion.

1. What is required. At least 80 hours a month of work, community service, participation in a work program or school at least half-time, or some combination. Earning income equal to 80 hours at the federal minimum wage also counts.
2. When it starts. States must begin by the end of 2026, which means the requirement is due to take effect on January 1, 2027, in most expansion states. States may start sooner. The federal government can give a state that shows a good-faith effort more time, but not past the end of 2028.
3. Who is exempt. The law lists exemptions, including pregnant and postpartum women, people who are medically frail or have serious disabilities, parents and caretakers of young children or of a person with a disability, people in substance-use treatment, recently released prisoners for a period, and some veterans with disabilities, among others. The details depend on the federal rules and on each state's procedures.
4. Who checks. States must verify compliance when people apply and at renewal, and may check more often. They are supposed to use data they already have, such as wage records, to avoid making people submit paperwork when the state can confirm the facts itself.

The case for the requirement is that work brings dignity and income, and that public coverage should be tied to effort for those able to give it. The case against rests on what happened in Arkansas and, more recently, in Georgia, which has run a narrower program with a work requirement since July 2023 and has enrolled far fewer people than it projected. Most adults on Medicaid who can work already do, often in jobs with irregular hours. The people at most risk are those whose hours vary month to month, those with conditions that do not fit neatly into an exemption category and those who simply cannot navigate the reporting system. The evidence from Arkansas is that a work requirement mostly reduces coverage, not unemployment.

Medicaid: renewals, costs and the financing squeeze

The work requirement gets the headlines, but several less visible changes may matter as much.

Eligibility checks every six months. For adults in the expansion group, states must redetermine eligibility every six months instead of once a year, starting with renewals after the end of 2026. Every renewal is a chance to lose coverage over paperwork, even when a person is still eligible. The experience after the pandemic coverage protections ended in 2023, when millions of people were dropped, many for procedural reasons, is a guide to what more frequent renewals can do.

Cost sharing. Starting in October 2028, states must charge expansion adults with incomes above the poverty line some cost sharing for many services, with limits on the amount per service and on total costs as a share of family income. Primary care, mental health care, substance-use treatment and some other services are protected.

Shorter retroactive coverage. Medicaid has long covered medical bills from the months just before a person applied. The law shortens that window, which matters to people who learn they qualify only after a hospital stay.

Provider taxes and state-directed payments. Most states finance part of their Medicaid share through taxes on hospitals, nursing homes and other providers. The law freezes new provider taxes and, beginning in 2028, gradually lowers the limit on these taxes in expansion states. It also caps the extra payments states can direct to hospitals and other providers. Supporters call these taxes a gimmick that inflates federal spending. Hospitals, especially rural ones, say the money keeps their doors open. Either way, as the federal share shrinks, states will have to find money elsewhere or cut back.

Immigrants. Beginning in October 2026, the law limits federal Medicaid funding for many lawfully present immigrants who are not permanent residents or in a few specified categories. Refugees and asylees who have not yet become permanent residents are among those who lose eligibility.

Rural hospitals. To soften the effect on rural areas, the law created a $50 billion Rural Health Transformation Program, distributed to states over five years. Critics note that the fund is smaller than the projected loss of federal Medicaid money to rural providers.

SNAP: work rules and the cost shift to states

SNAP, the Supplemental Nutrition Assistance Program, helps about one in eight Americans buy food. The July 2025 law changes it in three main ways.

Expanded work requirements. SNAP already limited adults without dependents to three months of benefits in three years unless they worked or trained at least 80 hours a month. The law raised the upper age for that rule from 54 to 64 and applied it to parents whose youngest child is 14 or older. It also removed exemptions that Congress had added in 2023 for veterans, people experiencing homelessness and young adults who had aged out of foster care, while adding protections for some Native Americans. It made it harder for states to waive the rule in areas with high unemployment.

States pay for benefits. For the first time, states will pay part of the cost of SNAP benefits, starting in fiscal year 2028, which begins in October 2027. The share depends on each state's payment error rate, a federal measure of how often benefits are paid in the wrong amount. States with low error rates pay nothing; states with higher rates pay up to 15 percent of benefit costs. Separately, starting in fiscal year 2027, which began in October 2026, states must pay 75 percent of SNAP administrative costs instead of half.

Benefit calculations. The law limits future increases in the Thrifty Food Plan, the basis for SNAP benefit amounts, to inflation unless they are cost neutral, and narrows how utility costs are counted for some households. It also limits eligibility for many lawfully present immigrants, keeping it mainly for permanent residents and a few other groups, and it ended funding for SNAP-Ed, the program's nutrition education arm.

The case for the cost shift is that states administer SNAP and should have a stake in getting it right. The risk is that error rates partly reflect how hard a state's caseload is to manage, and that a state facing a large bill may respond by cutting staff, tightening access or even considering whether to keep running the program at full scale. The people who would feel that are children, older adults and workers with low wages, who make up most SNAP recipients.

A reframe: what is really being asked

The debate over these changes is often framed as a question about work. Most people agree that adults who can work should. But that frame hides the real question: what is the right amount of paperwork to stand between a person and the help they qualify for? A work requirement that lost coverage mostly for people who were already working, as in Arkansas, is not a work policy. It is a paperwork policy with a work label.

Progressives have sometimes made this argument harder by defending every part of the status quo. There are real problems in how these programs work: payment errors, financing schemes that strain credibility, gaps between what states promise and what they deliver. A stronger position acknowledges those and offers fixes that do not cost people their coverage, such as automatic verification using existing data, simpler renewal forms and investments in state systems.

Some provisions may change again. The new Congress that takes office in January 2027 will have Democratic majorities in both chambers, but changes to the law would still need a president's signature, and nobody can say now which provisions, if any, will be revised. What is certain is that the timeline is staggered. The SNAP work rules are already in effect, the administrative cost shift began with the federal fiscal year in October 2026, the Medicaid work requirement and six-month renewals are due to start with the new year, and the SNAP benefit cost shift and Medicaid cost sharing arrive later. Each date is a chance for states, advocates and families to prepare.

The people who will feel it

Behind every provision are particular people. A home health aide with a variable schedule who works 90 hours one month and 60 the next. A grandmother raising a teenage grandson who now falls under the SNAP work rule. A rural hospital deciding whether it can keep its maternity ward open. A refugee who arrived legally and worked from the first month, now ineligible for help that had been promised. A man just released from prison, trying to find work while managing a chronic condition.

These are not strangers. They are neighbors, coworkers and family members in red states and blue ones. Medicaid expansion was adopted in many states with Republican leadership and passed by ballot measure in others, including some of the most conservative states in the country. That is a sign that keeping people covered is not a partisan cause, and it suggests where the coalitions to protect it can be found.

What you can do

The most important work on these changes happens in state capitols and county offices over the next two years. Some steps:

• Make sure your own registration is current, and help others. If you or someone you know relies on Medicaid or SNAP, update your address and contact information with your state agency so renewal notices arrive. Local organizations, including food banks, legal aid groups and health-access nonprofits in every state, can help people sort out exemptions and paperwork.
• Call your state legislators. States decide how hard or easy compliance will be, from using existing data to automatically verify work to how much they spend replacing federal funds. Enter your address in the representatives lookup and you get your state senator and state representative as well as your members of Congress, each with a phone number and contact form.
• Comment on the federal rules. Agencies are writing rules to carry out the law, and those rules decide how exemptions and verification work. The public comment page lists federal rules open for comment right now, closing soonest first, with guidance on writing a comment that counts.
• Follow the safety net coverage. The safety net topic page collects reporting on state implementation, coverage losses and proposals to change the law.