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HCA seeks major staffing and IT funding as SNAP payment-error risk could cost state up to $150M
Summary
Health Care Authority Secretary Carrie Armijo told lawmakers the agency requests sizable FY27 funding for ISD staffing (about 260 caseworkers), IT upgrades and EBT chip cards to address higher workloads and SNAP payment-error risks that could cost the state as much as $150 million.
The Health Care Authority requested substantial FY27 resources on Jan. 28 as it prepares to implement federal changes to SNAP and Medicaid that will increase redeterminations and program demands.
Cabinet Secretary Carrie Armijo told the Legislative Finance Committee that the agency’s FY27 base and expansion total request is roughly $15 billion and that the general‑fund base request is $2.2 billion (a $116 million increase over FY26). For the Income Support Division specifically, Armijo said the FY27 general‑fund base request is about $140 million, with major cost drivers including a change in the SNAP administrative match and infrastructure/administrative supports.
Armijo said three major operational changes drive ISD’s needs: SNAP payment-error risk (which could force state repayments), increased redeterminations and work/community engagement requirements, and the need to upgrade eligibility systems. "We predict needing about 260 new caseworkers to do the work associated with the reconciliation bill," she said, adding that the agency had already received 78 positions in the special session and was asking for the delta to reach 260.
On the SNAP payment error issue, the secretary emphasized the difference between payment errors and fraud: "Payment error rates are not a measure of fraud, and I think it's really important to understand that," she said, noting that the state’s error rate rose partly because COVID-era waivers ended and interim reporting was paused. Armijo described a multi-pronged approach — training, analytics procurement, case-review teams, and IT modernization — and said the agency has "a high confidence" it can reduce error rates while timing reforms to avoid triggering immediate higher state cost-sharing.
Other HCA proposals included EBT chip cards to reduce card-selling and theft, analytics tools to identify error trends by worker and office, investments to sustain child support distributions, and funding to backfill SNAP admin funds that will no longer be available. Armijo also flagged a $25 million estimate to implement federal reconciliation requirements and a $37 million plan to backfill federal SNAP revenue losses for FY27.
Lawmakers pressed Armijo on hiring, use of AI and analytics, cybersecurity and facility-level questions about rural hospitals and treatment foster care. Armijo said the agency is using some AI tools to flag cases and support caseworkers, but federal rules limit fully automated eligibility decisions. She also said it takes about a year to train staff for program determinations and stressed that both technology and workforce investments are needed.
Armijo concluded by asking the committee to weigh the budget request in the context of expected federal changes and a constrained surplus; follow-up data and budget hearings were scheduled.
