Federal agencies warn Texas not meeting SNAP, Medicaid requirements; state risks losing funding

Federal agencies said that Texas is currently not meeting federal requirements to process applications for Medicaid health insurance and food benefits leading to delays and backlogs. The agencies warned that, if the issue persists, they would withhold federal funding.

The warning comes after the Lone Star State kicked more than a million people off Medicaid in the last year, many of whom may still be eligible for coverage, due to procedural reasons, according to a report by Axios.

Large backlogs can lead to longer waits for people to regain coverage and access health care. The issue has also affected recipients of the Supplemental Nutrition Assistance Program (SNAP).

Now, the federal Centers for Medicaid and Children's Health Insurance Program (CHIP) services, and the U.S. Department of Agriculture are requiring the Texas Health and Human Services (HHSC) to provide a plan to remedy the errors or lose funding associated with administering the programs.

"[HHSC] continues to be riddled with backlogs, delays, errors, and failing leadership. Families are being denied SNAP food assistance and more than two million Texans have lost access to a family physician and must reapply for Medicaid coverage," U.S. Rep. Lloyd Doggett, D-Austin, said.

"Texans will continue to suffer until we have competent state leadership that prioritizes those most in need. Any loss of federal funding, even administrative funds, would be a direct result of the Abbott HHSC's failures."

States paused regular Medicaid eligibility checks during the pandemic, allowing people to keep coverage. They began rechecking in April 2023. But the state's issues with the program started well before then.

The backlog began growing in March 2022 due to staffing shortages, according to the letter. The state hired more people and reduced backlogs as it began its rechecks last year. But the backlog again increased.

As of this April, about 2.1 million Texans had lost their Medicaid coverage— nearly 1.4 million of them for procedural reasons like outdated information, not because they were ineligible, according to the report.

States generally have 45 days to decide whether someone is eligible for Medicaid, but about 40% of the state's Medicaid applications are taking longer than that, according to Axios.

Medicaid is not the only service being threatened. In fact, USDA is also threatening to suspend nearly $8.4 million of SNAP funds if HHSC does not come into compliance with federal SNAP requirements. As of May 3, Texas reported more than 90,000 backlogged SNAP applications, a decrease from its previous 166,000 backlogged applications, with the oldest from August 2023.

"For the tens of thousands of families awaiting consideration and approval of benefits, Texas has not addressed the backlog and timelines issues as urgently as it should," USDA wrote to HHSC Executive Commissioner Cecile Young on May 21. "Low [application processing timelines] have a real and significant impact on eligible families who struggle to put food on the table.

In response, spokesperson Jose Andres Araiza told Axios that HHSC "is taking all possible actions to provide benefits to eligible Texans as quickly as possible."

The agency now estimates it can come into full compliance by Sept. 1, 2025.