By Carol Gundlach, senior policy analyst, and Debbie Smith, Cover Alabama campaign director

While many Alabamians were celebrating July 4, Congress passed a sweeping budget reconciliation law that will hurt families across the country. To extend more than $1 trillion of tax cuts for the richest Americans, Congress slashed health care, food assistance and other vital services for ordinary people.

“It’s wrong to hurt people who are struggling to help people who are already far ahead,” Alabama Arise executive director Robyn Hyden said after the bill’s passage. “But Congress just passed legislation that will do exactly that. This budget bill is not only a moral failure. It’s bad policy, and it is a really bad deal for Alabama and our entire country.”

The biggest cuts nationally will be to Medicaid and to food assistance under the Supplemental Nutrition Assistance Program (SNAP). Alabama has not yet expanded Medicaid to cover adults with low incomes, but the harmful new budget law will make it harder for our state to improve and expand health care access. And the law’s SNAP cuts and barriers will increase hunger and hardship across Alabama.

SNAP cuts will make it harder to make ends meet

The SNAP cuts will threaten Alabama’s ability to fund essential state services. They also will impose red-tape barriers for SNAP participants and reduce the future buying power of SNAP.

Threats to state budgets: Beginning in 2026, the Alabama Legislature will have to appropriate an estimated $35 million a year in new funding for SNAP administration. Beginning in 2027, the Legislature also may have to appropriate an estimated $172 million annually in new funding to help cover SNAP benefits, which have been fully federally funded for decades. If Alabama lawmakers cannot or will not provide the required state share of funding, the state would have to reduce the number of SNAP participants or opt out of the program entirely. Eliminating SNAP would end food assistance for more than 750,000 Alabamians and send hunger rates soaring in a state where 1 in 4 children already struggle with food insecurity.

Changes that place time limits on more people who receive SNAP: Many older adults, families with teen children, veterans, people who are experiencing homelessness and young adults who were in foster care may face burdensome new work reporting requirements to receive food assistance. And beginning immediately, many people who are legally in the United States as refugees, asylum seekers or victims of domestic violence or sexual assault may no longer be eligible for SNAP.

Changes that likely will reduce the amount of SNAP assistance over time: The new law prohibits the federal government from making substantive changes to the USDA’s Thrifty Food Plan, on which the amount of SNAP benefits is based. This change will reduce the value of SNAP assistance over time.

Health care cuts will increase human suffering

Reconciliation cuts to Medicaid primarily targeted states that had expanded Medicaid, but the bill also will make it harder for Alabama to improve our Medicaid program. The law also failed to renew subsidies that make health coverage more affordable for hundreds of thousands of Alabamians.

The law eliminates key financial incentives that encouraged Alabama and other states to expand Medicaid. We no longer will be eligible for $619 million in additional federal funding on top of the 90% federal match, which would have helped pay for the startup costs of Medicaid expansion.

The law also includes restrictions on provider taxes — a key tool Alabama uses to help fund its share of Medicaid. This will make it more difficult for Alabama to expand coverage going forward and could put a long-term limit on how our state finances Medicaid as health care costs rise.

Congress also failed to renew enhanced tax credits that have made Marketplace plans under the Affordable Care Act (ACA) more affordable since 2021. These subsidies have helped hundreds of thousands of Alabamians lower their monthly premiums. Now, those enhanced subsidies are going away at the end of 2025.

The cuts to healthcare.gov tax credits mean that Alabamians’ monthly premiums will increase and fewer people will qualify for financial help. About 130,000 Alabamians are expected to lose coverage because of these changes.

Where we go from here

Arise is taking numerous steps in response to this law’s passage. These actions include:

• Analyzing the law’s long-term impact on SNAP, Medicaid and ACA financing.
• Creating resources for partners, community organizations and the public to explain the changes and what they mean. 
• Meeting with state and local leaders to discuss options and ensure they understand the financial and human stakes of these changes. 

Even in the face of harmful federal policies, Arise’s commitment to the people of Alabama remains strong. We are working every day to protect access to food and health care and make sure families have the information and support they need.