Alamance County officials warn federal HR1 changes could cut local SNAP and Medicaid funding

Alamance County’s Department of Social Services told commissioners on Wednesday that recently enacted federal rules (referred to in the meeting as HR1) will change eligibility and administrative funding for SNAP and Medicaid and could materially affect the county’s budget.

“Our administrative reimbursement is moving from 50% to 25%,” Candice Goble, director of Alamance County DSS, said. “That administrative shift translates to about an $890,000 decrease in our revenues in the next fiscal year.” She said the county is still awaiting detailed state guidance on how the changes will be operationalized in NCFAST and other state systems.

Goble summarized three categories of HR1 changes the county is tracking: expanded federal work‑and‑community‑engagement requirements, changed eligibility for some noncitizen categories, and reduced federal administrative matches. She said SNAP work requirements and tightened verification rules (including new documentation steps tied to federal systems) are already affecting case processing.

Goble also described a separate funding risk under HR1: a new federal rule would require states with high SNAP payment‑error rates to share the cost of benefits. “North Carolina had a payment‑error rate of 10.21% in federal fiscal 2024, which placed the state in the highest tier for cost sharing,” she said; meeting presenters cited a statewide exposure figure on the order of hundreds of millions of dollars. She warned that one state option would be to decline the cost‑sharing model and opt out of SNAP, a step that would have large statewide consequences.

Health‑department staff presented a related estimate: extrapolating Congressional Budget Office figures and state projections, the county’s health department estimated roughly a 3% drop in Medicaid enrollment under HR1 assumptions, which the presenters translated to an approximate $115,000 annual reduction in Medicaid revenue to the county health department. Staff repeatedly cautioned the estimate is preliminary and sensitive to implementation details.

Commissioners and staff pressed for additional detail on how many local residents might become ineligible and how the county will track those changes. “I don’t have a projection of how many folks will be removed,” Goble said, noting that NCFAST coding and state reporting will govern case tracking and that many details remain to be clarified.

Why it matters: The county budget team is preparing a recommended budget and five‑year projections; an $890,000 revenue reduction in a single fiscal year would force tradeoffs between staffing, services and reserves if no alternate funding is identified. Commissioners asked staff to return with scenario analyses and potential options — including state advocacy, internal programming adjustments, and service‑delivery efficiencies — ahead of formal budget adoption.

Next steps: DSS and health department staff said they will continue to refine estimates, work with state agencies on NCFAST implementation, and brief commissioners with updated fiscal projections and proposed mitigation strategies during the budget process.