Medicaid and SNAP Cuts Could Cost US 1 Million Jobs

A report has predicted that the proposed federal budget cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP) could result in severe economic repercussions across the U.S., including the loss of millions of jobs.

Why It Matters

About 24 percent of people in the U.S. are enrolled in Medicaid, according to an estimate from NYU Langone Health, and as of October last year, more than 72 million people across the country held Medicaid coverage, according to the Centers for Medicare and Medicaid Services.

Meanwhile, more than 41 million Americans rely on SNAP benefits, making it the country’s largest food-assistance program. It provides monthly food benefits to low- and no-income families, boosting their grocery budget so that they can afford healthy and nutritious food.

Cuts to both program’s funding could have a significant impact not only on beneficiaries but also more widely on the American public.

What To Know

Following the passing of the GOP’s budget, which called for the cutting of at least $880 billion over the next decade for programs under the jurisdiction of the House Energy and Commerce Committee and at least $230 billion for programs under the House Agriculture Committee, there have been significant concerns about the impact this would have on the recipients of certain federal programs.

These programs include Medicaid and SNAP, which provide essential healthcare and nutritional support to millions of Americans.

However, authors writing for The Commonwealth Fund have outlined how potential cuts could have much wider impacts than just those on the recipients of these programs.

The report predicted that the combined cuts could lead to a loss of 1 million jobs and a $113 billion decline in states’ gross domestic products (GDPs), and $8.8 billion in lost state and local tax revenue in 2026.

The majority of this impact stems from the potential cuts to Medicaid, which the report noted could lead to a $95 billion loss in state economies by 2026 and the loss of 477,000 jobs in the healthcare sector, and another 411,000 jobs in various other industries.

Meanwhile, the cuts to the SNAP program are forecasted to result in a $18 billion hit to state economies in 2026.

143,000 jobs would be lost nationwide, the report added, with 78,000 jobs in
food-related sectors such as grocery stores, agriculture, and food production, and another 65,000 jobs in other industries affected by reduced consumer spending.

State and local tax revenues would also decrease by $1.8 billion, the report noted.

The report emphasized that the proposed Medicaid and SNAP funding reductions would cause a “ripple effect” across state economies as the two programs lose funding and then are forced to reduce jobs and services. This would have a knock-on effect on the economic activity in other sectors.

Leighton Ku, one of the authors of The Commonwealth Fund report, told Newsweek that, because of this effect, even those on private insurance will also be impacted by the Medicaid cuts.

“If you’re in a poor rural area, and your local doctor’s office has to close, your local hospital has to close, that creates problems for people who are privately insured in that area too,” he said.

What People Are Saying

Leighton Ku, director of the Center for Health Policy Research and a professor at Milken Institute School of Public Health, who was also one of the authors of The Commonwealth Fund report, told Newsweek that there was a much “broader effect” of Medicaid and SNAP benefit cuts than the impact for the recipients of those services.

He said: “If you are a conservative legislator, you may not feel great concerns about people losing health insurance, but on the other hand, if you’re told that your state will lose millions or billions of dollars in its economy and that unemployment is going to go up and that state and local tax revenues are going to be tighter, then that might cause a different sort of concern to you. So not only should there be concern for the low income people who are the direct beneficiaries of these programs, but there really are broader economic and employment affects.”

What Happens Next

Lawmakers remain divided on how to approach federal spending. Some believe meaningful cuts are only possible by overhauling the Medicaid system, framing it as a move to improve efficiency rather than reduce benefits. Others are pushing back, arguing that now is not the time to shrink social safety net programs.