Federal SNAP, Medicaid cuts could harm Alabamians and the state budget, advocates say

Yahoo

02-06-2025

The U.S. Capitol building in Washington, D.C., is pictured on Wednesday, May 7, 2025. Federal cuts to SNAP and Medicaid could significantly strain Alabama's budget, but Sen. Greg Albritton, R-Atmore, chair of the Senate Finance and Taxation General Fund committee urged caution due to the bill's uncertainty, despite critics calling the measures "cruel." (Photo by Jennifer Shutt/States Newsroom)
A budget bill passed by the U.S. House of Representatives could impose significant financial and social challenges in Alabama.
The measure could cut food assistance and Medicaid program funding that serve hundreds of thousands of people with low incomes in Alabama, and potentially cost the state hundreds of millions of dollars annually. It's still unclear if it will pass the U.S. Senate.
The legislation, which passed the House largely along party lines, proposes funding reductions to the Supplemental Nutrition Assistance Program (SNAP) and Medicaid. Experts and state officials warn the cuts could lead to increased hunger, loss of health care coverage and other economic consequences across the state, particularly in vulnerable rural communities.
'There are three things in the bill, as it came out of the House, that are problematic for SNAP,' said Carol Gundlach, a policy analyst with Alabama Arise, an organization working on poverty issues. 'The first — and the biggest and the most important one — is it shifts cost-sharing to the states.'
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Historically, states have paid 50% of administrative costs for SNAP, but the benefits themselves have been 100% federally funded. The new bill, Gundlach said, would increase Alabama's share of administrative expenses to 75%, costing the state an estimated additional $35 million.
More concerning, she said, is the proposal to shift part of the benefit cost to the states. Gundlach said Alabama could be 'on the hook for about 15% of the actual benefit cost of SNAP,' amounting to at least $254 million annually.
'That would also presumably have to come out of the General Fund, and that's every year, every single year,' Gundlach said.
The proposed SNAP changes also include an expansion of work requirements for parents with children over the age of 7. This could force parents to 'jump through a bunch of hoops in order to keep your SNAP benefits, or they're going to cut your family SNAP benefits,' she said.
The bill could prohibit the U.S. Department of Agriculture from recalculating the base amount of SNAP benefits in the future, a measure Gundlach said would increase hunger as benefits fail to keep pace with food costs.
'Any way this works, people are going to lose SNAP benefits,' she said, warning that in a worst-case scenario, Alabama could walk away from the SNAP program completely, leaving nearly 1 million people dependent on SNAP, or about 20% of Alabama's population, without food assistance.
Debbie Smith, campaign director for Arise's Cover Alabama, said Alabama's 'bare bones' Medicaid program also faces pressures. According to Smith, the bill could cost Alabama '$324 million, I think, over 10 years' for Medicaid, translating to roughly $30 million annually. This could increase Alabama's Medicaid spending per resident by about 15%.
'Any cut to Medicaid is concerning when you have the bare bones program that we have. We really can't afford to cut anywhere,' Smith said. '$30 million for a year … that's still a big impact on our state budget.'
The bill would also eliminate the federal incentive designed to encourage states like Alabama to expand Medicaid, a significant concern for Smith.
'(The bill) sunsets that incentive, Jan. 1, 2026, so there's no time for anybody to take advantage of it before it sunsets,' Smith said.
Even without state expansion, the bill is expected to cause coverage losses. Smith said Arise projects 53,000 people could lose their Medicaid coverage. Combined with the potential expiration of enhanced subsidies for the Affordable Care Act (ACA) marketplace, 170,000 Alabamians could lose health insurance, leading to a $592.89 million increase in uncompensated care costs for the state, according to a Center for American Progress analysis.
The House bill also proposes reducing retroactive Medicaid coverage from three months to one month.
The combined potential costs from SNAP and Medicaid changes could put Alabama's General Fund in a challenging position, but Sen. Greg Albritton, R-Atmore, chair of the Senate Finance and Taxation General Fund committee, said it's still early in the process and that it's hard to plan for a bill that could still change.
'We know things are going to get tough, OK, but we don't know how tough they're going to be,' Albritton said.
Albritton said lawmakers had trouble finding an increase of about $220 million for Medicaid this past legislative session and he expects another significant increase next year. 'Between the changes of SNAP and other changes, that's going to put more pressure on us,' he said.
Albritton, who has often voiced concerns about federal program funding being pulled, suggested Alabama is somewhat prepared because it hasn't expanded Medicaid.
'That's something — at least one of the few things we don't have to worry about right now,' he said.
Arise described the bill's measures as 'cruel.' Gundlach described the situation as 'making parents choose between adequate care for their children and being able to put food on the table. If there is any definition of cruel, I don't know what else it could possibly be.'
Albritton pushed back against such characterizations, calling the term 'alarmist' and blaming partisan politics. He chose a more cautious approach.
'All I can do at this point is sit and watch and wait,' he said. 'There's a lot that we do not know, and we're running around trying to fix something that we don't know what the problem is.'
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