Maryland is bracing for more than $300 million in new supplemental nutrition-related costs just as the state enters an already challenging budget year. Federal changes under HR 1 are shifting major administrative and benefit responsibilities to states, and Maryland’s high error rate is putting even more pressure on the bottom line.
In a recent Maryland Matters article, the Maryland Department of Health (MDH) and the Maryland Department of Human Services (DHS) are warning that new federal requirements under HR 1 or the “One, Big Beautiful Bill Act” could drive state costs for delivering food assistance sharply upward, adding more than $300 million to the FY 2027 budget, at a time when Maryland is already confronting significant fiscal pressures. During a joint briefing of the Senate Finance and House Health and Government Operations committees, MDH and DHS outlined substantial new state obligations tied to changes in the Supplemental Nutrition Assistance Program (SNAP) and Medicaid.
Historically, the federal government covered SNAP benefits and split administrative costs with states. Under HR 1, states must now shoulder 75% of administrative expenses. For Maryland, that means increasing its current $115 million share by another $57.5 million annually, totaling roughly $172.5 million a year just to run the program.
As previously covered by MACo, in fiscal year 2028, states will begin paying for SNAP benefits depending on their “error rate,” or how much they over- or underpaid on benefits in previous years. For the first round of payments, states can choose to use error-rate data from fiscal years 2025 or 2026 to determine their share. However, from 2029 onward, states will use data from three years prior to calculating their annual cost-sharing amount.
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.
Maryland also faces new mandates for Medicaid, including work requirements and stricter eligibility rules for certain immigrant groups. Beginning in January 2027, roughly 320,000 Medicaid enrollees will have to verify eligibility every six months, a change expected to increase coverage disturbance as individuals struggle to keep up with frequent renewal requirements.
Taken together, these obligations compound what lawmakers describe as an already strained FY 2027 outlook.
