SF2422: SNAP/Public Assistance Reform

Requires all public assistance programs (childcare assistance, food assistance/SNAP, Family Investment Program/FIP, and Medicaid) use the Systematic Alien Verification for Entitlements (SAVE) online service to determine if a person has the legal status or citizenship to be eligible. Puts the definition of "alien" in Iowa law (meaning a person not a citizen or national of the US).  Supplemental Nutrition Assistance Program (SNAP) Changes: Requires Iowa HHS to consider the income and financial resources of ALL household members in determining eligibility, including those that are otherwise not eligible for SNAP.  Requires SNAP recipients to be a legal resident of the US (citizen/national, lawfully admitted alien, Cuban/Haitian, Marshallese/Compact of Free Association). Requires quarterly SNAP error rate reports be sent to Legislature (as well as USDA).  Requires Iowa HHS to submit a waiver to allow all unused SNAP benefits to be taken out of a person's account if not used within 3 months (91 days). Requires Iowa HHS to also submit a waiver to allow SNAP administrators to use other databases to confirm eligibility (including third party automated asset verification services and  automated employment verification services). Medicaid/Iowa Health & Wellness Plan Changes: Eliminates all retroactive eligibility for individuals who are not pregnant, a child, or a nursing home resident (and requires Iowa HHS to submit a waiver to do this).  Pregnant persons, children, and nursing home residents are allowed up to 2 months retroactive eligibility (effective 1/1/2027).  This latter part aligns with federal law (OBBB/HR 1).  Prohibits Iowa HHS from asking for a waiver or state plan amendment to enact retroactive eligibility for any group other than those noted above.  Medicaid Managed Care: Does not codify managed care, but does make it next to impossible for a new administration to get rid of it.  All MCOs in Iowa are health maintenance organizations (aka "HMOs").  They pay an HMO tax that goes into the Medicaid fund and is matched by federal funds. The bill expressly prohibits Iowa HHS from taking any action that would reduce the HMO tax going into Medicaid (without legislative approval).  If the state were to get rid of MCOs, they would no longer be paying the HMO tax, which would reduce the HMO tax going to Medicaid.  That would be against this new law.  So in effect, this change would stop any move Medicaid back to a fully fee-for-service system.  Medicaid Waivers & State Plan Amendments: Requires all future changes to Medicaid (state plan amendments and waivers) be expenditure neutral, meaning they do not increase spending for Medicaid, unless the Legislature directs this change to be made.  So this limits the ability of a new administration from making any changes without legislative approval, unless they either save money or do not cost the state more. This exempts changes and request  made prior to 1/1/2026 (even if not approved before the bill goes into effect).  So this should not impact the state's efforts to consolidate HCBS waivers.  Medicaid Exceptions to Policy: Requires Iowa HHS to make the following information public: 1) number of exceptions to policy granted; 2) types of exceptions to policy granted; 3) total cost of exceptions to policy granted; and 4) identifiable trends (number of exceptions in a particular geographic area; type of Medicaid services; and classification of individuals granted exceptions to policy.  This part of the bill is effective 1/1/2027.  Other Changes: Requires Iowa HHS to continue the "hospital directed payment program" (provider tax that brings in more federal matching funds). Requires Iowa HHS to set up an online system that allows Medicaid for Employed Persons with Disabilities (MEPD) members to pay their premiums electronically. Makes the bill effective upon enactment.

Signed by Governor June 2, 2026. Takes effect January 1, 2027.