Caldwell County Department of Social Services Director Kim Arnett told the Board of Commissioners on Oct. 27 that provisions in HR 1 and an ongoing federal shutdown could create significant administrative and benefit-cost exposure for the county.

Arnett said the county has about 14% of residents on SNAP, or roughly 11,141 people, and that under HR 1 states will be required beginning Oct. 2027 to share a portion of SNAP benefit costs tied to the states payment error rate. "If the error rate is over 10%" in North Carolina, "that's gonna be around a 15% cost share," Arnett said, and she estimated the statewide annual cost at about $420 million and Caldwell Countys share at roughly $3.6 million under current error-rate calculations.

Arnett described a separate administrative change that shifts the federal/local split for SNAP administration. "What happens now is the county pays 50% and the federal government pays 50%," she said. Beginning Oct. 2026 the state will be responsible for 75% of those administrative costs and counties would face an estimated $560,000 annual increase in Caldwell County based on current staffing and allocated operational expenses.

On Medicaid, Arnett said HR 1 introduces work and community engagement requirements for the Medicaid expansion population that will begin Jan. 2027. She said the county now has 12,864 Medicaid expansion participants and officials estimate a 15% to 25% reduction in enrollment among that group once the requirements take effect. Arnett also said annual recertifications for many Medicaid beneficiaries will move from once per year to every six months, increasing recertification volume by roughly 6,500 per year from the county's current workload of about 36,471 recertifications.

Arnett warned that the county's financial exposure depends in part on statewide error rates and on whether the state offers to assist counties with new costs. "We do not know what the state will do as far as helping with the county's cost," she said.

Arnett also addressed immediate impacts from the federal government shutdown. She said the U.S. Department of Agriculture has indicated SNAP benefits may be paused for November if the shutdown continues, and staff are preparing outreach and resource lists for local food pantries. "We put out a notice last week that this was a possibility and now we got more word today that if it continues, the November benefits will be paused," she said. Arnett added USDA has said some recipients may receive retroactive benefits after the pause.

Commissioners asked staff to prepare additional breakdowns of administrative cost allocations and to keep the board informed as federal and state guidance develops. The board received the presentation; there was no vote tied to the discussion.

Ending: Arnett and county staff encouraged residents who rely on benefits to monitor county social media and contact DSS for assistance; county staff will continue reporting to the board as more details about state and federal implementation become available.