Experts say tens of millions of Americans are in danger of losing Supplemental Nutrition Assistance Program (SNAP) benefits again if the cost-sharing law goes into effect for the government’s fiscal year 2028, which begins in October 2027, as planned.
Experts say most people are aware of the new SNAP work requirements in the large tax and spending package passed July 4, but the big change is the cost-sharing provision.
The federal government has always fully funded SNAP benefits, but states must partially fund benefits starting in fiscal year 2028 (October 2027 to October 2028) based on their payment error rates. The error rate measures how accurately state agencies determine participants’ eligibility and benefit amounts, including overpayments and underpayments to families.
Although payments are not required until FY2028, error rates in FY25 and FY26 determine the amount states must contribute to SNAP. While FY25 error rates have not yet been released, the latest data suggests most states may be owed hundreds of millions of dollars.
Lauren Ball, a fellow at the Brookings Institution, a nonprofit policy research organization, said this “will almost certainly lead to some states drastically cutting back on SNAP participation and may cause other states to stop participating in the program entirely.”
How does the new cost sharing work?
Cost sharing increases with error rates, except for states with error rates above 13.32%. They are exempt from the requirement to pay any portion of SNAP benefits for up to two years.
The rates for everyone else are as follows:
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If it falls below 6%, states will not have to pay any portion of SNAP benefits.
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If 6% to less than 8%, states pay 5%.
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If 8% to less than 10%, states pay 10%
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If 10% to less than 15%, states pay 15%
With SNAP food assistance benefits suspended during the government shutdown, Fulfill hosted a food distribution event for 1,000 people in the parking lot of Lakewood’s ShoreTown Ballpark late Wednesday, November 12, 2025, with food loaded into car trunks.
What does this mean for Americans?
The Congressional Budget Office said in August that different states would respond differently to the new legislation.
“Some states will maintain current benefits and eligibility; others will modify benefits or eligibility or exit the program entirely” if they cannot reduce error rates or afford their share of SNAP benefits, the report said.
In June, 23 governors signed a letter to congressional leadership saying they may have to end the SNAP program and explaining how the policy change would harm their constituents. About 42 million Americans, or more than 12 percent of the population, receive an average of $6 a day in SNAP benefits. About 40% of the beneficiaries are children.
During the record-breaking 43-day government shutdown that began on October 1, many Americans discovered how difficult it was to afford food after missing just one month of benefits. Analysts say losing SNAP entirely would be catastrophic.
They said SNAP’s effects could also affect non-SNAP recipients.
Ball explained that states could “make deep cuts in other areas of their budgets to make room for more state spending on SNAP, or otherwise raise taxes or revenue to be able to continue participating in the program.”
Some experts say continued high error rates could also prompt the Department of Agriculture (USDA) to suspend the program in a state.
Kent Smetters, director of budget modeling at Penn’s Wharton School who analyzed the primary legislation, said the USDA “could deem the state non-compliant and withhold federal funds or disallow benefits, effectively preventing SNAP benefits from being issued unless the state both complies with program rules and pays its required share.”
“In other words, while USDA cannot ‘eliminate SNAP’ as a legal program per se, continued noncompliance, including failure to pay 15 percent matching funds when needed, could result in federal SNAP funding being cut off,” he said. “For families like SNAP, they’re going to feel shut down until the state solves the problem.”
Can states reduce error rates?
The National Governors Association discussed this year how to reduce payment error rates while minimizing delivery interruptions for beneficiaries. Recommendations include pinpointing where errors occur, using technology such as artificial intelligence and automation to prevent errors, and improving employee training and morale.
“Two-thirds of states may be required to pay $100 million in cost-sharing penalties, leading to a strong push by states and territories” to reduce error rates, the report said.
According to the USDA, the average error rate in fiscal year 2024 was 10.93%. Only South Dakota has never had an error rate above 6 percent since 2003, Bauer said.
But reducing error rates is not easy. States will also begin paying a larger share of their state’s SNAP administration costs. Starting in fiscal year 2027 (i.e., October 2026), states’ share of administrative costs will rise from 50% to 75%, leaving states with even less money to invest in reducing error rates or paying fines.
According to the Center on Poverty and Inequality at Georgetown Law School, between higher administrative shares and error rate penalties, SNAP costs will rise sharply in all states. On average, states will have to spend two to three times their budgets on SNAP, with a median increase of about 202%.
Does anyone win?
Experts say the savings potential for the federal government is huge.
For example, based on the latest SNAP data, Smythes estimates that ending SNAP in Illinois alone would save the federal government $5 billion to $6 billion in annual benefit costs, plus a relatively small amount of federal administrative funding.
Beyond that, the new law is a “really bad idea,” Ball said. “I’m nervous and I want to make people more nervous,” so they focus on the issue. “There are growing concerns that Congress unexpectedly terminated the program.”
The government can choose not to enforce the law, but Power said it does not appear to be open to it because it insists it is rooting out fraud. Congress must pass a new law to reverse the new requirements, she said.
Medora Lee is USA TODAY’s money, markets and personal finance reporter. You can contact her at mjlee@usatoday.com and sign up for our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.
This article originally appeared in USA TODAY: Millions of Americans could lose SNAP if states can’t fix bugs or pay costs