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March 28.2025
2 Minutes Read

How Medicaid and SNAP Cuts Threaten Economic Stability and Jobs

Medicaid binder on desk with stethoscope and glasses, symbolizing healthcare policies.

Exploring the Consequences of Medicaid and SNAP Cuts

A recent report from the Commonwealth Fund and the George Washington University Milken Institute School of Public Health uncovers alarming potential consequences of proposed cuts to key federal assistance programs, Medicaid and SNAP. If enacted, these cuts could lead to the loss of approximately 1 million jobs by 2026 and a staggering $113 billion reduction in state gross domestic product (GDP).

The Financial Ripple Effects of Reduced Federal Funding

The U.S. House of Representatives is considering cuts of at least $880 billion over the next decade to various programs, including essential healthcare services and food assistance for low-income families. This proposed legislation threatens not only the livelihoods of individuals directly receiving benefits but also places additional strains on healthcare providers and businesses integral to the supply chain.

According to the report, health care providers such as hospitals and pharmacies, as well as grocery stores, directly rely on Medicaid and SNAP funding. The loss of revenue would force these businesses to downsize, resulting in job losses that would extend into sectors like retail and manufacturing, driving deeper economic challenges nationwide.

Understanding the Broader Implications on Job Markets

With Medicaid cuts alone projected to eliminate 477,000 healthcare positions, the effects don't stop there. An additional 411,000 jobs might vanish from other sectors as consumer spending plummets due to the loss of income and benefits. SNAP cuts could further exacerbate this issue, potentially leading to a loss of 143,000 jobs, particularly in the food sector.

The State and Local Economic Landscape

State economies are poised for significant strain, as they would collectively face a $95 billion decline in GDP from Medicaid cuts in 2026 alone, along with a $7 billion decrease in tax revenue. This economic fallout underscores the interconnectedness of public assistance programs and overall economic health, stressing the need for thoughtful policy decisions that consider the wider impact on communities.

Efforts to refine or eliminate such essential programs must critically evaluate not just the financial savings, but also the long-term human and economic costs that will inevitably ripple outward, affecting not only vulnerable populations but entire communities and industries.

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