Exactly how cuts to public assistance programs in President Donald Trump’s “One Big Beautiful Bill” will affect Minnesota is yet to be seen, though by one estimate, up to a quarter-million people in the state could lose Medicaid coverage over the next decade. Counties expect financial strain from new administrative requirements could drive up property taxes.
About $1 trillion in cuts to Medicaid could result in 12 million Americans losing coverage. In Minnesota, anywhere from 150,000 to 250,000 people could lose benefits under new Medicaid eligibility requirements, including a requirement for able-bodied adults to work, according to an analysis by the Kaiser Family Foundation, a public health policy nonprofit.
The reconciliation bill, which Trump signed into law last week after it passed the Republican-controlled U.S. House and Senate, requires people between the ages of 19 and 64 to work 80 hours a month to receive benefits. It also requires Medicaid providers to perform monthly and quarterly checks on addresses and eligibility. Typically, that happens annually.
Added paperwork could drive people to drop coverage, Minnesota Medicaid Director John Connolly said at a Tuesday hearing of the Minnesota House Fraud Prevention and State Oversight Committee.
Under the bill’s new requirements, the state could also lose about $500 million in federal reimbursements for hospitals and nursing homes each year, according to Department of Human Services Commissioner Shireen Gandhi, who also testified at the Tuesday hearing.
State officials say those losses could lead to the closure of rural hospitals and nursing homes that rely on federal aid to stay open.
Nearly 1.3 million Minnesotans are currently on Medicaid at a cost of around $12 billion each year. The federal program provides health coverage for low-income people, children and the disabled.
The Kaiser Family Foundation estimates that around two-thirds of people on Medicaid between 19 and 64 were employed. Three in 10 were exempt for reasons like caregiving responsibilities, illness or disability.
County costs
Minnesota’s Department of Management and Budget is still working to figure out the exact fiscal impact of the bill, but could have estimates ready by the end of this week or early next week, according to an agency spokesman.
Counties are concerned that new eligibility and administration requirements will put strain on local taxpayers. Those include the new work requirement that, by one estimate, could add $160 million in workload and other costs to local governments. Minnesota is one of 10 states where counties handle Medicaid enrollment, meaning they would bear much of the responsibility and costs.
“We’re expecting property tax burdens to counties, increased workload for the folks that are currently working on eligibility, we’re concerned about the ability to add that workforce,” said Matt Freeman, a policy analyst with the Association of Minnesota Counties. “Making the system more complex with more steps doesn’t inherently prevent fraud.”
Metro counties that administer the largest assistance programs, such as Ramsey County, could see a lot more of that burden, Freeman said. It’s not yet clear how much it could affect the local tax burden. The association estimates that workloads could double for counties.
Many of the new requirements for Medicaid are not set to go into effect until early 2027, after the midterm elections, so they won’t immediately affect coverage. But there are other provisions on public assistance programs that are already in effect.
Trump’s big bill also makes about $186 billion in cuts to the Supplemental Nutrition Assistance Program, or food stamps, over the next decade and expands work requirements.
Able-bodied adults between the ages of 18 and 64 will have to verify whether they have a job. That’s up from 54. Around 450,000 Minnesotans are on SNAP and the state receives about $1.4 billion a year in aid for the program.
While an expanded work requirement for SNAP won’t take effect until 2027, new administrative rules are already in place. Reimbursements from the federal government will depend on the rate at which local governments properly provide benefits. If there’s an error rate above 6%, states will have to cover 5% to 15%. Minnesota was at a 10% error rate in 2024, though the rule would apply to 2025 and 2026 rates.
Under an earlier version of the big bill, which featured bigger SNAP cuts, Ramsey County was poised to see a $4.6 million increase in administrative costs alone, according to the county association.
The change could have forced counties to raise property taxes by 5% to account for cuts to SNAP and a drop in the federal share of administrative cost coverage. Ramsey County could have needed to raise property taxes by 10%, according to the analysis, though with smaller cuts, that hike would now likely be lower.
Special session?
Throughout the 2025 legislative session, Democratic-Farmer-Labor legislative leaders suggested lawmakers might have to return to the Capitol again later this year to address the effects of Trump’s big bill. Potential cuts to Medicaid and welfare programs like SNAP would require the state to make spending adjustments.
Republicans dismissed those concerns as hypothetical and said they’d have to wait and see what kind of bill would pass. Now that the president has signed the bill into law, it’s still not clear whether that will be necessary. At Tuesday’s hearing, Rep. Kristin Robbins, R-Maple Grove, reiterated that point, saying questions about who may or may not lose coverage remain speculative at this point.
Many of the newly enacted cuts aren’t set to go into effect until 2027 — after the midterm elections. The Legislature could likely address many of the issues in the 2026 legislative session, which starts in February.
House DFL Floor Leader Jamie Long said it’s too soon to tell whether there will be a need for a special session, though he acknowledged the bill probably won’t require a prompt return to the Capitol. When lawmakers do return, it’ll be tough to make up for the federal cuts.
“It does seem like we have some time to respond, but we know what’s coming, and it’s not going to be without a lot of harm for Minnesotans,” he said.