Posted on 12/03/25
| News Source: Maryland Matters
Baltimore, MD - Dec. 3, 2025 - Maryland could have to pay upwards of $300 million in 2027 to meet new federal costs to deliver food assistance to residents, with state that have high rates of administrative errors — like Maryland — having to kick in more.
That is just one of the big-ticket expenses that states will have to take on to implement changes in HR 1, the congressional budget reconciliation bill better known as the One, Big Beautiful Bill Act, state officials told lawmakers Tuesday.
In a virtual joint meeting of the Senate Finance and the House Health and Government Operations committees, legislators were told that changes to the Supplemental Nutrition Assistance Program (SNAP) and Medicaid will cost the state millions to implement.
Finance Chair Pamela Beidle (D-Anne Arundel) summed up the changes as “a lot of doom and gloom.”
“We have serious issues facing us this year,” she said.
Maryland is already implementing an increased work requirement for some SNAP recipients that began in November. Meanwhile, a majority of refugees and people granted asylum are no longer eligible for SNAP unless they also have lawful permanent resident status, known as “green card” holders.
But starting next year, states will have to take on more of the costs to administer SNAP, and those costs will likely only increase in later years. Lawmakers are already facing a significant budget deficit in the upcoming legislative session.
“There are very serious impacts to the state’s fiscal situation because of HR 1’s impact,” Larry Handerhan, an assistant secretary for the Maryland Department of Human Services, said in the virtual briefing.
Historically, the federal government covered all of the costs of SNAP benefits, and split the costs of administering the program with the states.
But under HR 1, states will be expected to contribute 75% of administrative costs, starting next year. For Maryland, which currently spends $115 million for its half of SNAP administrative costs, that means another $57.5 million each year, or a new state total of $172.5 million a year just to run the program.
Meanwhile, Maryland will likely have to pay some of the benefits themselves, due to a new penalty on states that have a high “payment error rate,” meaning benefits were overpaid or underpaid due to administrative mistakes, not due to fraudulent actions by recipients.
Under HR 1, states with an error rate over 6% will have to contribute some state money to fund SNAP benefits. Maryland’s error rate of 13.64% is one of the highest in the country. At that rate, the state would be expected to pay 15% of the $1.6 billion required to put money on Marylanders’ SNAP cards – or $240 million more than it pays now.
“It’s not fraud, it’s a question of bureaucracy,” said Webster Ye, chief of staff for the Human Services Department, said of the error rate. “It refers to overpayments and underpayments in which we, the Maryland state agency and the administrative staff, are the ones that make that mistake.”
Maryland’s error rate spiked in 2022 at 35.56%, which Ye attributed to a surge of use under the COVID-19 pandemic coupled with high turnover at the department that led to new staff who “weren’t adequately trained.” Before the pandemic, Maryland’s error rate was below 10%.
While it’s down from 2022m ,Maryland’s error rate is still in the top 10 among states and the District of Columbia.
The Department of Human Services is working to bring down the error rate by hiring more staff and providing additional training to administer the program, improving technical processes and working to streamline the application and renewal process.
“That’s great news,” said Del. Kathy Szeliga (R-Baltimore County), who initially asked if the error rate included benefit theft. “Obviously it would be a huge savings for the state and to taxpayers if you can bring that error rate down.
“Personally, I think it’s a good incentive for states, because the state doesn’t pay out any of this money,” Szeliga said of the penalties. “The federal government is expecting us to be good stewards of this money.”
Responding to Szeliga’s concern around benefit theft, Ye noted the state recently entered into a contract to update SNAP cards to a “chip and tap” technology, which is expected to help reduce SNAP fraud.
The meeting also went over some of the changes coming to Medicaid, many similar to the SNAP changes. Such “overlaps” include new work requirements to qualify for Medicaid as well as new restrictions on which noncitizen immigrants qualify for benefits.
Around 320,000 Medicaid recipients will also be required to prove they are eligible for coverage every six months starting in January 2027.
Perrie Briskin, deputy secretary with the Maryland Department of Health, said that eligibility provision will probably lead to the most “churn” and people will likely lose coverage if they don’t keep up with the frequent eligibility checks.
“When people have to redetermine their coverage, they often fall out of the system,” she said.
“It’s very disheartening, what we’re about to face,” Beidle said at the end of the meeting. “It’s really doom and gloom, and we’re just going to have to work together best we can do for the people of Maryland.”