SOS 3700 Module 10 Final Project: Health Policy Analysis Paper on SNAP Example

Restrict, Reward or Both? A Health Policy Analysis of State Waivers Limiting SNAP Purchases of Sugary Drinks and Candy

Student Name

B.S. in Health Studies, Thomas Edison State University

SOS-3700: Challenges in U.S. and Global Public Health

Mentor Name

Month Day, Year

Restrict, Reward or Both? A Health Policy Analysis of State Waivers Limiting SNAP Purchases of Sugary Drinks and Candy

Executive Summary

Since 2025, the U.S. Department of Agriculture (USDA) has allowed a growing number of states to bar Supplemental Nutrition Assistance Program (SNAP) benefits from buying soft drinks, energy drinks and, in some states, candy. This paper asks whether these waivers are an effective, fair and practical way to improve diet quality among low-income households. It finds that restrictions alone are likely to produce modest benefits because households can substitute cash, that they impose real costs on small retailers and participants, and that evidence is strongest for combining restrictions with incentives for healthy foods. It recommends that USDA approve future waivers only when they include a fruit and vegetable incentive and an evaluation design capable of measuring effects on purchases and diet.

Problem Statement

The underlying problem is poor diet quality and diet-related disease among low-income Americans, not the presence of soda on a receipt. SNAP reaches about 42 million people in a typical month and increases food spending, but it does little to change the nutritional makeup of what households buy (Hastings et al., 2021). Participants have lower diet quality than income-eligible nonparticipants, including higher intake of sugar-sweetened beverages (Andreyeva et al., 2015). Soft drinks are the single largest commodity by spending in SNAP households, though the gap with other households is about one percentage point of food dollars (Garasky et al., 2016). The policy question is how a federal nutrition program can improve diets without undermining its core purpose of reducing hunger. The stakes are high because diet-related conditions such as type 2 diabetes, hypertension and heart disease are more common among low-income adults, and their treatment costs fall largely on public programs. A policy that improved diets even modestly across tens of millions of people could matter more than an intensive program reaching a few thousand.

Background

SNAP's definition of eligible food has always been broad: food for home consumption, excluding alcohol, tobacco, hot prepared foods and nonfood items. Benefits are federally funded, states administer the program, and USDA may approve demonstration projects that test changes. USDA refused restriction requests from Minnesota in 2004 and New York City in 2011, citing difficulty defining products, retailer burden, weak evaluation plans and stigma. Advocates argued for exclusions on the grounds that a federal food program should match federal dietary guidance (Shenkin & Jacobson, 2010). The federal position reversed in 2025, when USDA approved Nebraska's waiver and then those of at least a dozen other states, most taking effect in 2026. Definitions vary from soft drinks alone to all items subject to state sales tax. Some states restrict only drinks with added sugar, while others include artificially sweetened beverages, and a few extend to candy bars, gum and other confections. These differences matter for analysis because a narrow definition is easier for retailers but leaves more substitutes available, while a broad one is harder to administer and may sweep in products participants consider ordinary groceries. Most approvals run for two years, which creates a natural point for review.

Evidence

The best direct evidence comes from a randomized trial in which a combined fruit and vegetable incentive and restriction on sugary drinks, sweets and candy improved diet quality more than no change, while the restriction alone produced smaller effects (Harnack et al., 2016). USDA's own Healthy Incentives Pilot, which returned 30 cents for every SNAP dollar spent on targeted fruits and vegetables, increased participants' fruit and vegetable intake in a randomized evaluation (Olsho et al., 2016). Simulation studies project modest reductions in obesity and diabetes from removing sugary drinks (Basu et al., 2014) and find a combined package of incentives and restrictions the most cost-effective option modeled (Mozaffarian et al., 2018). Against this, research showing that households treat SNAP dollars much like cash implies that many people would buy restricted items with other money (Hastings et al., 2021). Substitution is likely to be largest in households with cash income and smallest in households whose SNAP benefit covers most of their grocery budget. The evidence therefore suggests that restrictions alone will produce smaller effects in real stores than in trials, where participants could not easily shift purchases, and that the size of the effect will depend on how much of each household's food budget SNAP supplies.

Stakeholders and Political Environment

The policy's politics cut across usual lines. Supporters include the current federal administration, which frames the waivers as part of a chronic disease agenda, governors in states that applied and some public health researchers who see sugary drinks as a leading source of added sugar. Opponents include beverage and candy manufacturers and many retailer associations, which point to compliance costs, and many anti-hunger organizations, which see restrictions as stigmatizing and paternalistic. Participants' own views are mixed; when asked about program changes, many SNAP participants supported making the program healthier, especially through incentives (Leung et al., 2017). National polling shows substantial public support for removing sugary drinks from SNAP and stronger support for adding incentives (Franckle et al., 2019). Small and rural retailers may decide whether the policy works in practice, since they serve communities with few grocery options and face the highest relative costs of reprogramming registers and training staff. Finally, a 2025 federal law will shift more SNAP costs to states in coming years, which may make states more cautious about any change that raises administrative burden.

Criteria

The options are judged on five criteria drawn from the course: effectiveness in improving diet quality; equity, including effects on participants' dignity and on households in areas with few stores; administrative and retailer feasibility; cost to government; and political acceptability, which affects whether a policy lasts. Effectiveness and equity are weighted most heavily, because a policy that fails to improve diets or that harms participants' access to food would defeat the program's purpose, whatever its cost or popularity.

Options

Option 1, the status quo before 2025, keeps SNAP's broad definition of eligible food. It is simple and avoids stigma, but it does nothing to improve diet quality and leaves the problem unaddressed.

Option 2 continues approving restriction waivers as they are now written. It is politically popular in many states and costs the federal government little. Its effect on diet is uncertain because of cash substitution, it shifts costs onto retailers and participants, and its varied definitions and limited evaluation requirements make it hard to learn whether it works.

Option 3 replaces restrictions with incentives, expanding programs that give extra benefits for fruits and vegetables, such as the federal nutrition incentive grants created in the 2018 farm bill. Incentives have strong evidence and high acceptance among participants and anti-hunger groups. They cost more, require retailer systems to track eligible purchases and do not address sugary drinks directly.

Option 4 pairs restrictions with incentives under a common evaluation framework. States would restrict a clearly defined set of sugary drinks and receive federal support for fruit and vegetable incentives, with staggered start dates or comparison areas and transaction data allowing a credible evaluation. This option matches the strongest evidence, offsets the perception of punishment with a reward, and would produce knowledge that the current waivers will not. Its main drawbacks are cost and complexity: incentives require new federal and state money, and evaluation requires data agreements with retailers and payment processors. It also asks states that applied for simple restrictions to accept additional conditions, which some may resist.

Recommendations

USDA should adopt Option 4. Specifically, it should (1) approve new or renewed restriction waivers only when a state also offers a fruit and vegetable incentive, funded jointly through existing federal incentive grants and state contributions; (2) publish a standard definition of sugary drinks for waivers so results can be compared across states; (3) require an evaluation design with staggered rollout or comparison areas, using transaction data and dietary surveys, conducted by an independent evaluator; (4) give small and rural retailers technical help and a longer implementation period; and (5) set a sunset date so Congress can decide, on the evidence, whether to change the statutory definition of eligible food. Implementation would begin with renewals of the 2025 waivers, since most were approved for limited periods.

Implementation and Evaluation

Implementation would proceed in three stages. In the first year, USDA would issue the standard definition and evaluation requirements, and states renewing waivers would submit incentive plans and data agreements. In the second year, states would phase in restrictions and incentives together, store by store or county by county, which creates the comparison groups an evaluation needs. In the third year, an independent evaluator would report effects on purchases of restricted items, fruit and vegetable purchases, participant satisfaction and retailer costs, with results broken down by store type and rural or urban location. Success would mean a measurable shift in purchases without a drop in SNAP participation or in the number of authorized retailers, particularly in rural areas.

Revisions From Earlier Drafts

In response to mentor feedback, this compiled paper narrows the problem statement, adds the Healthy Incentives Pilot to the evidence, includes participants' own views in the stakeholder section and replaces a recommendation to end the waivers outright with a conditional approach that better fits the evidence and the political environment.

Conclusion

Restricting SNAP purchases of sugary drinks responds to a real problem, but restriction by itself is a weak tool for improving diet and carries costs for the people and stores it affects. The evidence favors pairing restrictions with incentives and measuring the results. Approving waivers on those terms would let the current wave of state experiments answer the question policymakers have debated for two decades: whether changing what SNAP buys can change what families eat.

References

Andreyeva, T., Tripp, A. S., & Schwartz, M. B. (2015). Dietary quality of Americans by Supplemental Nutrition Assistance Program participation status: A systematic review. American Journal of Preventive Medicine, 49(4), 594-604. https://doi.org/10.1016/j.amepre.2015.04.035

Basu, S., Seligman, H. K., Gardner, C., & Bhattacharya, J. (2014). Ending SNAP subsidies for sugar-sweetened beverages could reduce obesity and type 2 diabetes. Health Affairs, 33(6), 1032-1039. https://doi.org/10.1377/hlthaff.2013.1246

Franckle, R. L., Polacsek, M., Bleich, S. N., Thorndike, A. N., Findling, M. T., Moran, A. J., & Rimm, E. B. (2019). Support for Supplemental Nutrition Assistance Program (SNAP) policy alternatives among US adults, 2018. American Journal of Public Health, 109(7), 993-995. https://doi.org/10.2105/AJPH.2019.305112

Garasky, S., Mbwana, K., Romualdo, A., Tenaglio, A., & Roy, M. (2016). Foods typically purchased by Supplemental Nutrition Assistance Program (SNAP) households. U.S. Department of Agriculture, Food and Nutrition Service.

Harnack, L., Oakes, J. M., Elbel, B., Beatty, T., Rydell, S., & French, S. (2016). Effects of subsidies and prohibitions on nutrition in a food benefit program: A randomized clinical trial. JAMA Internal Medicine, 176(11), 1610-1618. https://doi.org/10.1001/jamainternmed.2016.5633

Hastings, J., Kessler, R., & Shapiro, J. M. (2021). The effect of SNAP on the composition of purchased foods: Evidence and implications. American Economic Journal: Economic Policy, 13(3), 277-315. https://doi.org/10.1257/pol.20190350

Leung, C. W., Musicus, A. A., Willett, W. C., & Rimm, E. B. (2017). Improving the nutritional impact of the Supplemental Nutrition Assistance Program: Perspectives from the participants. American Journal of Preventive Medicine, 52(2), S193-S198. https://doi.org/10.1016/j.amepre.2016.07.024

Mozaffarian, D., Liu, J., Sy, S., Huang, Y., Rehm, C., Lee, Y., Wilde, P., Abrahams-Gessel, S., de Souza Veiga Jardim, T., Gaziano, T., & Micha, R. (2018). Cost-effectiveness of financial incentives and disincentives for improving food purchases and health through the US Supplemental Nutrition Assistance Program (SNAP): A microsimulation study. PLOS Medicine, 15(10), Article e1002661. https://doi.org/10.1371/journal.pmed.1002661

Olsho, L. E., Klerman, J. A., Wilde, P. E., & Bartlett, S. (2016). Financial incentives increase fruit and vegetable intake among Supplemental Nutrition Assistance Program participants: A randomized controlled trial of the USDA Healthy Incentives Pilot. American Journal of Clinical Nutrition, 104(2), 423-435. https://doi.org/10.3945/ajcn.115.129320

Shenkin, J. D., & Jacobson, M. F. (2010). Using the Food Stamp Program and other methods to promote healthy diets for low-income consumers. American Journal of Public Health, 100(9), 1562-1564. https://doi.org/10.2105/AJPH.2010.198549