To any Missourian who has spent hours hanging on the telephone, it’s no secret that Missouri’s social services systems need major upgrades. Phone calls get dropped, application processing times lag and people seeking help are often left with more questions than answers. 

Now, Missouri is being forced to up its game. 

As a result of new federal requirements, if the state doesn’t improve, costs for running those programs could skyrocket, potentially tipping the state into bankruptcy territory, the state’s director of social services told lawmakers earlier this year. Those new federal measures could force lawmakers to find hundreds of millions of dollars to cover the cost of the program. 

The Trump administration-backed HR1 imposed sweeping cuts to Medicaid and the Supplemental Nutrition Assistance Program and laid out a plan to transfer some of the cost of running those programs to states.  Now, Missouri is tasked with improving how it manages Medicaid and SNAP, while grappling with new federal requirements that came with the cuts. 

If Missouri can’t meet the new standards, it could be on the hook in the years to come for new costs of running the programs — more than $1 billion, Department of Social Services Director Jess Bax warned lawmakers during a budget presentation. The most costly penalties are still years in the future, giving the state time to improve its performance.

All the while, Missouri is facing a budget shortfall for the first time since the COVID pandemic, which led Congress to infuse billions of dollars of federal money into states. Those federal dollars temporarily helped plug gaps in the state budget, especially for social services.

“It’s time to pay the piper, so to speak,” said Amy Blouin, the president of the Missouri Budget Project, a progressive group that tracks Missouri’s spending.  

“Missouri has had significant issues, because we just have not invested in the type of infrastructure that we need to be able to make this right,” Blouin said. 

How does the Trump budget change things for Missouri Medicaid and SNAP? 

The Trump administration’s budget plan, dubbed by backers as the “One Big Beautiful Bill,” laid out a number of cuts to federal spending to pay for tax cuts and an increase in spending for administration policies like immigration enforcement. 

Under the budget, Medicaid enrollees will be required to prove they are working, volunteering, caregiving or in school for at least 80 hours a month to stay enrolled in the program. The state will also be responsible for taking on more of the cost of running the SNAP program and checking eligibility twice a year for its Medicaid program, known as MO HealthNet, compared to just once annually prior to the budget. 

That’s a sticky subject for Missouri, where renewal rates and pending renewal rates are consistently some of the worst performing in the country, according to data from Georgetown University’s Center for Children and Families. 

Tricia Brooks, a research professor at the center, warned that the tight timelines and major changes could lead to Americans who should have coverage losing it because their paperwork wasn’t processed on time. 

“It starts to snowball into something that ends up being a lot of people disenrolled for procedural reasons, when they should be eligible, and losing their coverage,” Brooks said. “They know that work requirements result in a loss of enrollment, and that’s how they’re capturing a big chunk of the savings that they’re saying they’re getting in HR1.” 

Missouri also has to do a better job of running those programs. The state needs to show improved numbers for things like payment errors or mistakes in checking eligibility, or it will essentially be forced to pay the federal government fines for poor performance. That means upgrading technology and hiring new staff, the agency told lawmakers. 

“The goals are incredibly challenging and aggressive,” said Rep. Kemp Strickler, a Lee’s Summit Democrat. He said the agency put forward a plan that made him confident the state can get the numbers on track. But, to make things more complicated, the timeline to make all of these changes is tight.

Those changes are rolling out at a near-constant pace until late 2029. But the federal government’s roadmap for how it wants those changes to look leaves many questions for state agencies, and can make it hard to plan for the major mandated policy changes.

Take work requirements as an example. The agency will need to have the tracking program up and running by December, but officials aren’t expecting instructions on how to do that from the Centers for Medicare and Medicaid Services until June. 

“There’s quite a few things we can do, but making some final decisions and implementing technology changes within six months is warp speed,” Bax said. “So, just (as a) frame of reference, a lot of this stuff does not have guidance from the federal government.” 

Missouri lawmakers are now being asked to fund all of these upgrades after years of federal coronavirus funds flooding the state budget. 

“A lot of things were funded with one-time revenue sources, basically,” said Elias Tsapelas, the director of state budget and fiscal policy at the libertarian Show-Me Institute. “They were plugging a lot of holes for a lot of years with federal money they knew wasn’t going to be permanent.” 

2026 means playing catch up for Missouri Medicaid and SNAP programs

The crux of the problem hinges on Missouri’s outdated technology and a general trend of understaffing amid high turnover at the Department of Social Services, Bax told lawmakers. 

“I knew there was a lot of work to be done,” Bax said. “That we were in a situation where we had outdated technology and resources that were kind of historical. Decisions had led to not having enough resources.” 

In 2019, Missouri’s error rate for processing Medicaid applications, renewals and payments was 35%. Missouri has until 2029 to get the rate below 3%, or it will be on the hook for paying those federal penalties. 

For SNAP, the most recent data available show the state’s processing error rate sitting around 8.6%, Bax said. To avoid taking on a higher share of the cost, the state is aiming to get the error rate for SNAP under 6%. 

While Medicaid penalties will hinge on meeting the 3% error rate by late 2029, picking up the cost for the SNAP program will start as early as next year. 

In Missouri, the programs that help process applications and payments for Medicaid and SNAP are outdated and don’t do a good job of sharing information, experts say. Getting those programs in order is the main objective. 

“Basically, Missouri’s computer systems are just really not capable of doing all those things in their current form,” Tsapelas said. “Our error rate should be better than this. So I am happy we’re moving that direction, even if there might be a couple bumps along the way.” 

HR1 couldn’t come at a worse time for Missouri 

These new costs, and a potential for hundreds of millions more in the years ahead, come at an inopportune time for Missouri’s budget, Blouin said. And any of those federal penalties could lead the state to turn to other essential services to compete for funds, which could mean cuts to education, prisons or other social services. 

“This $2 billion shortfall going forward is completely man-made,” Blouin said.

“What makes us unique is we were already at the bottom of the barrel,” she said. “So we don’t have space to cut, there was no fluff in our budget.”

Notably, the search for new funding sources comes as lawmakers are exploring paths to axing Missouri’s income tax, which makes up over 60% of the state’s general revenue funds. And even before this plan, the state’s general revenue was predicted to slow in the years ahead. 

“It’s a very sobering time right now in the budget room,” Strickler said. “Every kind of expense is going to have to be looked at closely and make sure that it is doing what we need it to do.”