September 2, 2025

Dear Community Partner,

On July 4, 2025, the President signed into law the One Big Beautiful Bill Act (OBBBA) (the Act). This communication is intended to inform community partners about provisions in the legislation that will impact the Supplemental Nutrition Assistance Program (SNAP) and Medicaid (MA).

The following changes as a result of the Act are not yet in effect and will not be enacted until the Office of Temporary and Disability Assistance (OTDA) and the New York State Department of Health (NYSDOH) issue implementation guidance. 

Supplemental Nutrition Assistance Program (SNAP)

SNAP ABAWD Changes

• Increases the Age of Those Subject to the ABAWD Time Limit:

The Act expands the age range for those who are subject to the ABAWD time limit. The Bill changes the ABAWD work rules age range to those 18-64 years old (currently, the work rule is 18-54).

•  Establishes a Dependent Child Age Threshold of 14 Years for Exemption from the ABAWD Time Limit:

The ABAWD exemption for adults residing in a SNAP household with a child under 18 is modified and now applies only to adults residing with a child under 14.

• Removes Three Existing ABAWD Exemptions:

The Act removes the 3 specific exemptions from the ABAWD time limit established by the Fiscal Responsibility Act (FRA) of 2023. These are:

• Homeless individuals
• Veterans
• Individuals aged 24 or younger and in foster care on their 18th birthday.

• Adds One New ABAWD Exemption:

The Act includes an ABAWD exemption for individuals who are Indians, Urban Indians, California Indians, and other Indians who are eligible for the Indian Health Services.

• Changes to the ABAWD Waiver Criteria:

The Act limits the criteria states can request an ABAWD waiver to areas of the state that have an unemployment rate of over 10 percent. States are no longer able to seek ABAWD waivers for “lack of sufficient jobs”.

SNAP Policy/Eligibility Changes:

• SNAP Eligibility for Non-Citizens: The Act further limits SNAP eligibility for non-citizens to only include Legal Permanent Residents, Cuban and Haitian Entrants, and those allowed to live in the US under the Compacts of Free Association. OTDA will provide updated policy information, as well as a revised Non-Citizen desk guide (LDSS-4579), when further federal guidance is issued.

• Limits on “Heat and Eat”: States are restricted from increasing a household’s utility-based income deduction due to the household receiving a nominal HEAP benefit unless the household contains an elderly or disabled member. Households ineligible for the $21 HEAP payment may still be eligible for the Tier 2 (utility) or Tier 3 (telephone) based on household circumstances. OTDA will provide guidance on implementation of the changes when federal guidance is issued.  

Other SNAP-related Changes

• Thrifty Food Plan Adjustments: The Act limits when USDA can update the Thrifty Food Plan that is used as one factor in calculating SNAP benefit values. As a result, benefit adjustments would largely be based on Consumer Price Index changes. As a reminder, benefit amounts are released each year as part of the October SNAP Standards. There is no action required by districts as a result of this provision. 

• SNAP-Education Program Funding Eliminated: Federal funding is eliminated for the SNAP Education program effective at the end of FFY25 (September 30, 2025).

SNAP Funding Changes

• SNAP Benefit Cost-Shift: The Act newly shifts responsibility for paying a portion of SNAP benefits onto states that have a Payment Error Rate (PER) of 6% or higher. The exact percentage of the state share is determined by the state’s PER. Benefit cost shift is effective October 1, 2027 (FFY28).

• SNAP Administration Cost-Shift: Effective October 1, 2026, the federal share for SNAP administrative costs will be reduced from 50% to 25%, which will increase the State/local share from 50% to 75%.

Medicaid (MA)

Most of the impact of the passed reconciliation language on Medicaid becomes effective December 2026 or January 2027, including the work requirements and restrictions on immigrant populations. More information on work requirements and restrictions on immigrant populations will be provided when guidance is published by the New York State Department of Health.

Provisions that will go into effect as of December 2025 or January 2026 include enhanced ACA subsidy expiration, as well as Essential Plan elimination and funding cuts.

Funding Impact:

The reconciliation bill is anticipated to impact New York State health and healthcare at a total of $13.5 billion, with $10 billion in lost federal funding and $3.5 billion in new state costs. These losses will affect the following:

• 1.5 million individuals statewide will lose coverage, including 950,000 individuals in New York City (800,000 from Medicaid and 150,000 from Essential Plan)
• The New York Essential Plan is anticipated to lose $7.5 billion, while New York State anticipates $2.7 billion in additional costs. As a result of these costs, 730,000 individuals will lose Essential Plan coverage statewide. Of these individuals, 506,000 will move to Medicaid and 224,000 will become uninsured.
• Uncompensated care costs will increase by $1.3 billion, and New York City hospitals and other providers will experience a loss of revenue.

Other notable health-related changes driving coverage and access to loss include:

• Immigrant eligibility restrictions
• Expiration of Affordable Care Act (ACA) enhanced subsidies
• Medicaid community engagement/work requirements with certain exemptions
• Twice annual eligibility reverifications
• Exclusion of Planned Parenthood from Medicaid funding
• Provider tax restrictions
• A reduction in the Emergency Medicaid expansion match rate

These changes are also anticipated to impact several specific New York demographics:

• Children: 44% of New York State children are covered by Medicaid/CHIP.
• Low-Income and Nursing Home Residents: Medicare does not provide sufficient coverage for low-income residents in need of residential care. Medicaid covers 64% of NYS nursing home residents.
• Disabled New York State Residents: Hundreds of thousands of disabled New York State residents rely on Medicaid to afford healthcare.
• Children of Veterans: An estimated 3.4 million children of veterans nationwide are covered by Medicaid/CHIP.
• Immigrants: Various reconciliation provisions impose restrictions on benefit eligibility for lawfully present immigrants.
• Black and Latino New Yorkers: Low income, black, and Latino New Yorkers have higher rates of Medicaid and Essential Plan use and will bear the burden of these cuts, thus experiencing further exacerbated social determinants to their health.

Please note that this summary is not intended to be exhaustive of all that is contained within the reconciliation bill, nor absolutely conclusive on all of its impacts. Our goal is to highlight key pieces that we feel will have impact on New York and specifically our NYC clients. We will be sure to send updates once we have more details to share about impact and implementation.

We will work to keep you informed as new developments occur.



Sincerely, 

Office of Community Outreach 

NYC Department of Social Services