Medicaid & SNAP: Federal Cuts Coming into View

What happened:
The One Big Beautiful Bill Act, signed into law earlier this year, set in motion the largest cuts to Medicaid in the program’s history — roughly $1 trillion over ten years. Implementation timelines are now becoming concrete. The Centers for Medicaid and Medicare Services (CMS) is required to release an interim final rule on Medicaid work requirement implementation by June 1, 2026. Work and reporting requirements for Medicaid expansion adults take effect January 1, 2027. Eligibility redeterminations shift from annual to every six months beginning October 1, 2026.

What this means for Pennsylvania:
Pennsylvania’s Department of Homeland Security (DHS) Secretary has warned that more than 300,000 Pennsylvanians could lose Medicaid when work requirements take effect. The state will also absorb a greater share of the Supplemental Nutrition Assistance Program (SNAP) administrative costs starting October 1, 2026. SNAP work requirements are already being enforced statewide, with Lancaster and Lebanon cities currently exempted under a transitional waiver until September 2026. Pennsylvania faces a projected $20 billion reduction in federal Medicaid funding over the next decade if current law is fully implemented.

What it means for Pennsylvania nonprofits:
The demand shift onto nonprofit human service providers will begin before the end of this calendar year — not in some future budget cycle. Organizations providing healthcare navigation, housing assistance, food access, behavioral health services, and workforce development will face increased caseloads at the same moment that federal and potentially state funding is contracting. Rate-based human service providers — already flat-funded for six of the last ten state budget cycles — face compounding pressure from both sides. Nonprofits that have not already begun scenario planning for increased service demand and reduced reimbursements should start now.

What to watch:
The June 1 CMS interim final rule will provide critical detail on how work requirements will be implemented and verified, what documentation enrollees must provide, and how much flexibility states like Pennsylvania will have in implementation. PANO will share analysis of the rule when it is released and will connect members to advocacy opportunities through the comment period.