Part 2 examines the enacted Medicaid and SNAP provisions in Public Law 119-21 (H.R. 1, 119th Congress). This section focuses on statutory changes to eligibility conditions, work requirements, benefit calculations, verification systems, cost sharing, and federal–state financing structure.

All descriptions reflect the enacted statute and official summaries available at the time of publication. Regulatory guidance, court rulings, or subsequent amendments may alter implementation details.

Part 2A (SNAP)

The SNAP provisions are primarily contained in Title I (Agriculture and Nutrition), Subtitle A (Nutrition), Sections 10101–10108.

They modify three structural components:

• Work requirement eligibility rules
• Benefit calculation mechanics
• Federal–state cost sharing

Work Requirement Modifications (Sec. 10102)

Section 10102 amends existing SNAP work requirement provisions applicable to certain adults without dependents.

The statute:

• Adjusts the covered age range for work requirement enforcement
• Revises exemption categories
• Limits certain state waiver authorities
• Maintains time limits for noncompliant individuals

Under the SNAP framework, individuals subject to the Able-Bodied Adult Without Dependents (ABAWD) rule may receive benefits for only three months in a 36-month period unless they meet qualifying activity requirements.

Qualifying activities include:

• Employment
• Approved job training
• Workfare participation
• Certain educational programs

Exemptions continue for:

• Individuals medically certified as unfit for employment
• Individuals responsible for dependent children
• Other statutory categories defined in Section 10102

Operational impact depends on state verification systems and compliance documentation procedures.

Thrifty Food Plan and Benefit Calculation Changes (Sec. 10101)

Section 10101 revises the statutory framework governing reevaluation of the Thrifty Food Plan (TFP).

The Thrifty Food Plan determines maximum SNAP allotments.

The statute:

• Modifies how the TFP may be reevaluated
• Restricts certain administrative adjustments
• Channels future updates through defined indexing methods

While this does not alter categorical eligibility, it influences benefit growth rates and long-term maximum allotments.

Shelter Deduction and Utility Adjustments (Secs. 10103–10104)

Sections 10103 and 10104 modify how certain household expenses are treated when calculating a SNAP household’s net income. Net income is the number used to determine the final benefit amount.

Under SNAP rules, benefits are calculated using the following general structure:

Gross income
minus allowable deductions
equals net income

Net income is then applied to the Thrifty Food Plan formula to determine the household’s monthly allotment.

Two of the largest deductions affecting SNAP households are:

• Shelter deduction (housing costs)
• Utility deductions

Shelter Deduction

The shelter deduction allows households to subtract certain housing costs from their income before benefits are calculated.

These costs may include:

• Rent or mortgage payments
• Property taxes
• Home insurance
• Utility costs (when applicable)

After subtracting other deductions (such as the standard deduction and earned income deduction), SNAP calculates excess shelter costs.

Excess shelter costs are defined as housing expenses that exceed 50 percent of the household’s adjusted income.

Higher shelter deductions generally result in lower calculated net income, which can increase SNAP benefit amounts.

Utility Allowances

Most states use a Standard Utility Allowance (SUA) rather than requiring households to document every individual utility bill.

The SUA is a fixed estimate used to represent average utility costs and may include:

• Electricity
• Heating or cooling costs
• Water
• Sewer
• Trash service
• Telephone service

Households that qualify for the SUA may subtract that standardized amount when calculating shelter costs.

Changes Introduced by Sections 10103 and 10104

The law modifies how certain expenses interact with these deductions.

Section 10103 alters how some forms of energy assistance affect eligibility for the Standard Utility Allowance. In certain circumstances, households must meet additional criteria before they can claim the allowance used in the shelter deduction calculation.

Section 10104 specifies that internet service fees may not be counted as allowable utility expenses when determining excess shelter costs.

What changes?

These adjustments do not usually determine whether a household qualifies for SNAP.

Instead, they affect how large the benefit amount is once eligibility is established.

Because the benefit formula is sensitive to deductions, even small changes in allowable expenses can slightly increase or decrease monthly allotments.

For example, if a household previously counted internet service as part of its utility expenses within the shelter deduction calculation, removing that expense from the formula could increase calculated net income and reduce the final benefit amount.

The exact impact varies depending on household income level, housing costs, and state-specific utility allowance policies.

Section 10103 modifies how certain energy assistance interacts with the Standard Utility Allowance.

Section 10104 restricts treatment of certain internet connection expenses in the excess shelter deduction calculation.

These adjustments affect net income determination and monthly benefit amounts.

Administrative Cost Sharing (Sec. 10106)

Beginning Fiscal Year 2027 (October 1, 2026), Section 10106 reduces the federal administrative reimbursement rate from 50 percent to 25 percent.

States must assume 75 percent of administrative costs.

Administrative costs include:

• Eligibility processing
• Case management systems
• Quality control operations
• Compliance monitoring

Benefit Cost Sharing (Sec. 10105)

Beginning Fiscal Year 2028 (October 1, 2027), Section 10105 requires states to contribute to SNAP benefit costs based on their payment error rate:

• Error rate under 6 percent (0 percent state share)
• 6 percent to under 8 percent (5 percent state share)
• 8 percent to under 10 percent (10 percent state share)
• 10 percent or higher (15 percent state share)

Payment error rates are determined through federal quality control review procedures.

This provision establishes a direct fiscal relationship between state administrative accuracy and state financial obligation.

Noncitizen Eligibility (Sec. 10108)

Section 10108 narrows statutory SNAP eligibility for noncitizens to specified categories, including:

• U.S. citizens and nationals
• Certain lawful permanent residents
• Cuban/Haitian entrants
• Certain Compact of Free Association residents

Other noncitizen categories not listed are excluded from eligibility.

Part 2B (Medicaid)

The Medicaid provisions are primarily located in Title VII (Committee on Finance), Subtitle B (Health), Chapter 1 (Medicaid), Sections 71101–71120.

These sections modify:

• Eligibility conditions
• Engagement requirements
• Redetermination frequency
• Cost sharing
• Program integrity
• State financing mechanisms

Community Engagement Requirement (Sec. 71119)

Section 71119 adds new Social Security Act §1902(xx), requiring states to condition Medicaid eligibility for certain expansion adults on demonstrating community engagement.

Effective January 1, 2027 (states may implement earlier).

Applies generally to:

• Nonpregnant, nondisabled adults
• Ages 19–64
• Enrolled under Medicaid expansion eligibility categories

Requirements include:

• Demonstration of qualifying engagement (commonly referenced in implementation guidance as 80 hours per month)
• Defined exemption categories
• Documentation and verification procedures

Failure to comply may result in coverage termination.

Federal summaries also indicate that individuals who lose Medicaid solely due to engagement noncompliance may still be treated as eligible for minimum essential coverage for purposes of determining Marketplace premium tax credit eligibility.

Six-Month Redeterminations (Sec. 71107)

Section 71107 requires states to redetermine eligibility every six months for specified Medicaid expansion adults beginning after December 31, 2026.

Redetermination includes:

• Income verification
• Residency verification
• Eligibility category review

This replaces the standard annual redetermination for affected populations.

Cost Sharing for Certain Expansion Adults (Sec. 71120)

Effective October 1, 2028, Section 71120 requires states to impose cost sharing greater than zero dollars on specified Medicaid expansion adults with income above 100 percent of the federal poverty level.

Statutory caps:

• Maximum 35 dollars per service
• Total family cost sharing capped at 5 percent of household income

Certain services are excluded from cost sharing.

Program Integrity Provisions (Secs. 71103–71105)

Sections 71103–71105 require:

• Address validation procedures
• Cross-state enrollment data submission
• Screening against the Social Security Death Master File
• Removal of deceased beneficiaries and providers

These provisions are intended to reduce improper payments and duplicate enrollment.

State Financing Constraints (Secs. 71114–71118)

Public Law 119-21 modifies several Medicaid financing mechanisms, including:

• Adjustments to provider tax safe harbor thresholds (Sec. 71115)
• Changes affecting certain state directed payments in managed care (Sec. 71116)
• Reinforcement of budget neutrality standards for demonstration waivers (Sec. 71118)

These provisions affect how states structure their share of Medicaid funding.

Implementation Timeline

October 1, 2026 (FY2027)
SNAP administrative reimbursement shifts to 25 percent federal (Sec. 10106).

January 1, 2027
Medicaid community engagement requirement becomes mandatory (Sec. 71119).

After December 31, 2026
Six-month Medicaid redeterminations begin (Sec. 71107).

October 1, 2027 (FY2028)
SNAP benefit cost sharing tied to error rates begins (Sec. 10105).

October 1, 2028
Medicaid cost sharing required for specified expansion adults above poverty (Sec. 71120).

The SNAP and Medicaid provisions in Public Law 119-21 primarily adjust program structure rather than eliminate coverage categories outright. The changes focus on compliance requirements, verification frequency, financial responsibility, and administrative accountability. Implementation will determine the degree of impact at the household level.

Part 3 will examine the border, immigration, and enforcement funding provisions contained in the law.

Sources

Public Law 119-21 (H.R. 1, 119th Congress), enacted text, available at Congress.gov.

Congressional Research Service (CRS), “SNAP and Related Nutrition Programs in P.L. 119-21: An Overview.”

Congressional Research Service (CRS), “Health Provisions in P.L. 119-21.”

Centers for Medicare & Medicaid Services (CMS), Informational Bulletin regarding Section 71119 (Community Engagement Requirement).

U.S. Department of Agriculture, SNAP statutory and implementation guidance materials.