Shifting Federal Costs for Food Assistance, Health Care, Other Priorities to States Would Cause Widespread Harm

House and Senate Republicans are working overtime to rush through a federal budget plan that would cut off large portions of federal funding for food assistance, health care, and other vital programs while requiring states and localities to pick up more of the tab. If adopted, the plans — which also include trillions of dollars in tax cuts heavily tilted toward the wealthy — would in effect force states to take health care and food assistance away from millions of people. The plans also threaten cuts to other state-supported services that people count on, especially people with low incomes.

The budget legislation reportedly includes measures that would push more of the costs for SNAP, Medicaid, and potentially other bedrock federal supports to the state and local level. Advanced under the claim that states need more “skin in the game,” these plans would simply force harmful, widespread cuts. State and local governments are in no position to shoulder large new funding responsibilities, given that the economy is increasingly flashing warning signs and state finances are already highly strained. And because states must balance their budgets each year, many would likely struggle to cover the added costs even when times are good.

Because most states and localities would be unable to fully cover the added costs by raising new revenues, they would have to impose cuts — either directly to Medicaid and the Supplemental Nutrition Assistance Program (SNAP) or by shifting funds from other state services, such as education, and likely both. Those cuts would leave people with serious health conditions unable to visit a doctor or afford lifesaving medication, parents unable to afford the high cost of groceries, and residents overall with lower-quality schools, child care, community centers, roads and bridges, and other state and local services.

Republican plans for SNAP and Medicaid, two of the nation’s keystone supports for children, families, and others who need assistance, are especially alarming:

• SNAP. One Republican proposal reportedly gaining steam would require states to pay part of the cost of SNAP benefits. Ever since creating the program in its current form nearly 50 years ago, the federal government has fully paid for food benefits, while states pay about half of the cost of administering the program. Nationwide, SNAP currently helps more than 42 million people afford enough to eat, about 90 percent of whom are in families with children, or older adults (age 60 or older), or people with disabilities. SNAP’s modest but meaningful benefits average only $6.20 per person per day.

  If states had to cover a share of SNAP benefit costs, which totaled about $94 billion in 2024, they would almost surely be forced to cut benefits, eligibility, or both to reduce costs. That would effectively abandon the decades-long national commitment to providing low-income families with a food assistance benefit that’s sufficient to afford an adequate diet — no matter what state they live in. The harm would be particularly acute during recessions, when more people become eligible for SNAP, due to lost jobs and income, at the same time state revenues are dropping.

  Even a seemingly modest cost-sharing requirement would hit states hard. If states had to cover 10 percent of SNAP benefit costs, Pennsylvania last year would have had to pay almost $427 million to ensure that families didn’t lose food benefits. That’s about 1.5 times what the state spends on its entire community college system. In West Virginia, meeting a 10 percent match would cost almost twice as much as the state spends on child care assistance and child protective service workers combined. Other states would face similarly hard tradeoffs.

• Medicaid. Republicans are also considering cutting hundreds of billions of dollars from Medicaid through a mix of harmful changes that would add new costs for states and undermine health coverage for millions of people as a result. Nearly 72 million people have health coverage through Medicaid, and federal dollars cover more than two-thirds of the program’s cost.

  One proposal would cut the federal matching rate for medical services for adults with low incomes who gained coverage thanks to the Affordable Care Act. Facing huge added costs, a number of states likely would simply drop the expansion, causing millions of people to lose Medicaid coverage and up to 10.8 million people to become uninsured. Similarly, capping federal Medicaid funding per expansion enrollee would also lead to deep and harmful funding cuts over time. States would almost certainly respond by cutting eligibility, slashing benefits for remaining enrollees, reducing payments to hospitals and physicians — or all three — threatening coverage for millions of people.

  Additional proposals would undermine states’ ability to finance their share of Medicaid costs, such as by restricting state taxes, assessments, or fees on health care providers. The Congressional Budget Office predicts that barring or sharply restricting these provider taxes, which every state except Alaska currently uses, would result in states having to cut their Medicaid programs, since states wouldn’t be able to replace the lost revenue from these taxes. Other new restrictions on policies that states use to help administer Medicaid, such as state directed payments, would effectively cut provider rates and further limit enrollees’ access to care.

The threats go well beyond food assistance and health coverage. Republican budget plans are also poised to include cuts in annually appropriated non-defense programs, such as education and housing. These cuts could impose additional costs on states and localities indirectly. For example, if the federal government cuts support for public education, either through legislation or executive branch dismantling of federal education supports such as Title I, then either states and localities must fill in the gap or overall resources for schools will fall.

President Trump also says he intends to shift natural disaster response from the Federal Emergency Management Agency (FEMA) to the states — an enormous responsibility that states are in no position to shoulder. And the early wave of chaos playing out in states because of cuts led by the so-called Department of Government Efficiency (DOGE) — billionaire Elon Musk’s campaign of agency layoffs and grant terminations across the federal government — will almost certainly generate economic damage and increased budget costs for states and localities, with promises of even deeper DOGE-led cutbacks to come.

States simply can’t absorb substantial new costs for bedrock public programs long funded at the federal level. If Congress approves massive cuts in federal support, people and communities in every state will pay the price.