Relationship between SNAP and Medicaid Expenditures

A new study shows that medical costs decrease significantly when children in low-income families have improved access to food. Supplemental Nutrition Assistance Program (SNAP) Participation and Health Care Cost & Utilization for Health First Colorado Members, was issued by the Eugene S. Farley, Jr. Health Policy Center at the University of Colorado School of Medicine, and the study was undertaken in partnership with the Colorado Evaluation and Action Lab.

SNAP and Colorado’s Medicaid program for adults, Health First Colorado, and children, CHP+, are critical safety-net programs that increase food and health care security for low-income individuals. While there are differences in eligibility for these programs, there is substantial overlap in the income eligibility requirements. National research suggests that upwards of 75% of households receiving SNAP benefits also have at least one individual on Medicaid or the Children’s Health Insurance Program; this is especially true in Medicaid expansion states such as Colorado.

To learn whether participation in SNAP leads to lower Medicaid expenditures, the study linked SNAP administrative data with Health First Colorado/CHP+ administrative and claims data from 2014 to 2018. Monthly medical care costs for the utilization of primary care, emergency department, and pharmacy services were assessed for each member.

The findings show an increase in use of primary care services for children and youth under the age of 18 years participating in SNAP, but total health care costs decrease due to reduced reliance on specialty care and fewer hospital stays. The study similarly shows that younger adults (age 18-54) enrolled in Health First Colorado use more health services when they are on SNAP, but in this case, total health care costs increase. This is potentially because adults are more likely than children and youth to have chronic conditions that are less immediately responsive to changes in food security and nutrition.

“While further study is needed, it’s important to keep in mind that an initial increase in health care costs may be good news,” says Dr. Kristin Klopfenstein, the report’s co-author and Colorado Lab director. “An increase in medical costs for adult SNAP recipients could mean that improved access to food frees up the resources they need to invest in their care, like resuming taking medications.” As well, the findings suggest that long-term SNAP participation helps to offset these increased health care costs over time.

“This study shows compelling fiscal savings to bookend the already well-established health benefits and improved educational outcomes for children and youth participating in SNAP. I hope these findings further fuel increased SNAP enrollment across Colorado, especially in the counties where enrollment lags the most.”

SNAP and Health First Colorado/CHP+ Co-Enrollment (2018) (View one-pager here)

To learn more about this study, contact Dr. Kristin Klopfenstein.