Here’s how federal Medicaid, food stamp changes will impact Utah taxpayers
Aug 23, 2025, 7:00 AM | Updated: 7:32 am
Utah taxpayers will shoulder a higher share of administrative costs associated with food stamps under the so-called "big, beautiful bill," but rough estimates suggest the state can avoid having to chip in to cover benefits directly. (Laura Seitz/Deseret News)
(Laura Seitz/Deseret News)
SALT LAKE CITY — Utah taxpayers will shoulder a higher share of administrative costs associated with food stamps under the so-called “big, beautiful bill,” but rough estimates suggest the state can avoid having to chip in to cover benefits directly.
That’s according to initial estimates prepared by state agencies and presented to lawmakers this week, as they prepare for upcoming changes to Medicaid and food stamps, or the Supplemental Nutrition Assistance Program. The specifics are still up in the air, and presenters cautioned that things could change in either direction as the federal government clarifies how the law will be enacted.
“If you’ve ever been to chemistry, everything has three states. There’s solid, gas and liquid,” Russell Frandsen, with the Legislative Fiscal Analyst’s Office, told the Social Services Appropriations Subcommittee. “These are gas estimates. That’s how solid they are.”
Even so, the numbers provide state lawmakers with a first look at what the changes to federal programs could look like. Here’s how some of the changes to social programs will be felt in Utah:
A roughly $13 million price tag
Food stamp benefits are funded by the federal government, but states are tasked with administering the benefits; the two have shared administrative costs 50-50. That will change in fiscal year 2027, when states will be required to cover 75% of food stamps administration, while the feds will chip in 25%.
In Utah, that will amount to an increased cost of about $13 million, “give or take a few $100,000,” according to financial analyst Josh Pittman. Administrative costs are variable, Pittman told the Economic and Community Development Appropriations Subcommittee on Tuesday, meaning the costs will “fluctuate on economic conditions, number of applicants and other economic variables.”
“So, $13 million is sort of assuming that we have a great year like last year,” he said. “It could be more; it could be less. So, the number is — I believe the technical term is ‘squishy.'”
Starting in fiscal year 2028, the federal government will no longer fund 100% of food stamp benefits. Instead, states with high administrative error rates will be expected to contribute up to 15% of the total cost.
States with error rates below 6% won’t have to pay anything, however. Utah’s error rate for 2024 was 5.74%, primarily due to overpayments. If the state can stay under the threshold of 6% by the time that provision takes effect, Utah will only have to shoulder the roughly $13 million administrative increase. An error rate between 6% and 7.99% would cost the state an additional $20 million, while an error rate of 10% or more would cost $60 million.
“There is some room for improvement, but (I’m) just really happy to be in the position that we are,” said Rep. Jordan Teuscher, R-South Jordan.
Medicaid changes
States and the federal government contribute to Medicaid health insurance benefits, and Utah could save close to $33 million over the next several years. However, tens of thousands of low-income Utahns could also lose benefits thanks to Medicaid changes in the spending bill.
The changes are related to Medicaid eligibility and administration. Here’s how some of the key provisions will impact Utah, according to a state fiscal analysis:
- Adding work requirements for people covered under Medicaid expansion could lead to about 25,000 Utahns losing coverage.
- Delayed eligibility regulations “may” lead to an additional 6,300 Medicaid clients losing coverage.
- An additional 5,400 Medicaid and CHIP clients could lose benefits because the new law removes migrants with temporary protected status, refugee status or asylum status from eligibility.
- It’s estimated that another 1,800 people will lose coverage due to more frequent eligibility checks for those with expanded Medicaid.
- Limiting retroactive enrollment is expected to lead to fewer months of coverage for some 8,000 Medicaid members.
- Utah will receive reduced federal funds for Emergency Medicaid services for about 1,100 people due to the law eliminating the federal matching rate for emergency payments for “nonlawful residents.”
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