On July 4, 2025, the One Big Beautiful Bill Act of 2025 (OBBBA) was signed into law. As a result, Michigan is facing significant and concerning updates to its Medicaid and SNAP programs that will have wide-reaching effects on residents’ health and access to essential services. These changes are expected to reduce coverage and support for many vulnerable populations.
The Supplemental Nutrition Assistance Program (SNAP) supports over 1.7 million Michigan households, helping prevent food insecurity. Key changes include:
- Low-Income Home Energy Assistance Program (LIHEAP) deduction may reduce SNAP benefits
- Internet Expense Deduction removed
- Work Requirements: Waiver for Able-Bodied Adults Without Dependents (ABAWDs) is being rolled back, requiring more individuals to work or face SNAP loss
- Changes to Immigrant Eligibility: Certain refugees and asylees previously considered eligible may have benefits reduced or terminated
- Enrollment Frequency: Enrollment for SNAP may now occur every six months, instead of annually
- Error Rate-Based Funding Cuts: States will be required to pay a portion of SNAP benefits based on their Payment Error Rate (PER), effective FY28
- Administrative Cost Shift: Federal funding for SNAP administration will decrease from 50% to 25% starting FY27, requiring Michigan to cover 75% of administrative costs
Medicaid currently provides coverage for roughly one in four Michiganders and is a critical lifeline for low-income residents. Major updates include:
- New work requirements for Healthy Michigan Plan (HMP):
- Applies to enrollees ages 19-64
- Must work, train, or volunteer at least 80 hours per month to maintain coverage
- Many exemptions and exceptions
- Effective January 1, 2027
- Six-month redeterminations instead of renewing eligibility annually
- Retroactive eligibility Limits (previously 90 days prior to application):
- HMP: Coverage now only 30 days prior to application
- Other Medicaid programs: Coverage now only 60 days prior to application
- Effective January 1, 2027
- Fewer coverage pathways for non-citizens
- Some lawfully present non-citizens may receive Emergency Services Only (ESO) coverage
- Lawful permanent residents remain eligible
- No longer eligible: Refugees, asylum grantees, trafficking victims, and more
- Effective October 1, 2026
- Financing and Provider Changes:
- Insurance Provider Assessment (IPA) tax to be discontinued
- Gradual reduction of provider tax cap
- State Directed Payments (SDP) to providers now capped at Medicare rates (replacing prior commercial-rate cap)
For a full review of the projected impacts of these changes on Michigan residents, see this Medicaid and SNAP Impact presentation by MDHHS shared during a Senate Appropriations committee hearing.
