A new report warns that potential Medicaid and Supplementary Nutrition Assistance Program (SNAP) could cause serious economic challenges.
The report was released Tuesday by the Commonwealth Foundation and the George Washington University School of Public Health.
The U.S. House budget resolution currently proposes to reduce federal funds by at least $880 billion in plans over the next decade, while under the Agriculture Commission, at least $230 billion in federal funds. A large portion of these cuts affect Medicaid and snapshots, which provide food benefits for low-income families. The exact details of these cuts will be completed in the upcoming legislation.
The researchers found that these cuts could result in a loss of 1 million jobs, down $113 billion in total state domestic products in 2026, and losses of state and local taxes lost $8.8 billion. Over the past decade, the combined losses could reach $11 trillion.
“While Medicaid and SNAP provide important health coverage and food assistance to impoverished Americans, direct recipients of Medicaid payments and SNAP benefits are health care providers – hospitals, doctor’s offices, pharmacies and nursing homes, as well as other grocery stores, as well as grocery and other food stores,” the report said. “The federal funding cuts for Medicaid and shrinking income for these businesses and their employees, as well as the impact of other businesses and workers in their supply chains, such as medical device suppliers, food producers and farms.”
The report added that these businesses must respond by reducing staff salaries and salaries, which subsequently reduce spending on consumer goods, further affecting the economy.
When looking at Medicaid cuts alone, state economies will lose $95 billion in GDP in 2026, while approximately 477,000 health care jobs will be lost. The report said 411,000 jobs will be lost in other areas, including retail, construction and manufacturing, because it “affects other industries.” State and local tax revenue will also drop $7 billion due to lower job losses in business and personal income.
When it comes to rapid cuts, state GDP is expected to drop $18 billion in 2026, while 143,000 jobs will be lost. This includes 78,000 jobs in the food sector (i.e., grocery stores, agriculture and food production), in other areas that are affected by reduced consumer spending, the report said. In addition, state and local tax revenues will fall by $1.8 billion.
“Medicaid and SNAP are fundamental to people’s health and well-being,” Joseph R. Betancourt, MD, president of the Commonwealth Foundation, said in a statement. “Slashing these programs will worsen the health of all Americans, especially for chronically ill patients who rely on Medicaid for ongoing care. Similarly, SNAP cuts will put more families in financial trouble, making it harder for them to afford basic necessities.
He continued: “The ripple effect will strike the entire healthcare system and affect everyone (not just Medicaid), bringing more people to the emergency room, further reversing the already overburdened system.”
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