The potential Medicaid and Supplemental Nutrition Assistance Program (SNAP) cuts could cause serious economic challenges nationwide, a new report warns.
The report was published on Tuesday by the Commonwealth Fund and the George Washington University Milken Institute School of Public Health.
The U.S. House of Representatives’ budget resolution currently proposes cutting federal funding by at least $880 billion over the next ten years for programs overseen by the Energy and Commerce Committee, and at least $230 billion for those under the Agriculture Committee. A large chunk of these cuts would affect Medicaid and SNAP, the latter of which provides food benefits to low-income families. The exact details of these cuts will be finalized in upcoming legislation.
The researchers found that these cuts could cause 1 million jobs lost, a $113 billion reduction in states’ gross domestic products and $8.8 billion in lost state and local tax revenue in just 2026. And combined losses could reach $1.1 trillion over a decade.
“Although Medicaid and SNAP provide vital health coverage and food assistance to impoverished Americans, the direct recipients of Medicaid payments and SNAP benefits are health care providers — hospitals, doctors’ offices, pharmacies, and nursing homes, among others — as well as grocery and other food stores,” the report said. “Cuts in federal funding for Medicaid and SNAP shrink revenue for those businesses and their employees, and the effects ripple across other businesses and workers in their supply chains, such as medical equipment suppliers, food producers, and farms.”
These businesses have to respond by reducing staffing and salaries, which then reduces spending on consumer goods, further impacting the economy, the report added.
When looking at just Medicaid cuts, state economies would lose $95 billion in GDP in 2026, and about 477,000 healthcare jobs would be lost. Another 411,000 jobs would be lost in other areas — including retail, construction and manufacturing — as the “effects extend to other industries,” the report said. There would also be a $7 billion reduction in state and local tax revenues because of lower business and individual income from job losses.
When it comes to the SNAP cuts, state GDPs are anticipated to drop by $18 billion in 2026, and 143,000 jobs would be lost. This includes 78,000 jobs in the food sector (i.e. grocery stores, agriculture and food production) and 65,000 jobs in other areas affected by reduced consumer spending, according to the report. In addition, state and local tax revenues would drop by $1.8 billion.
“Medicaid and SNAP are foundational to people’s health and well-being,” said Joseph R. Betancourt, M.D., Commonwealth Fund president, in a statement. “Slashing these programs will worsen health outcomes for all Americans, and particularly for people with chronic conditions who rely on Medicaid for ongoing care. Similarly, cutting SNAP will push more families into financial distress, making it harder for them to afford basic necessities.
“The ripple effect will hit the entire health care system and impact everyone — not just those with Medicaid — driving more people to emergency rooms and further straining an already overburdened system,” he continued.
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