Medicaid and SNAP cuts may eliminate over 1M jobs
A new report from the Commonwealth Fund outlines the potential economic damage of federal budget cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), which helps low-income families buy groceries.
Researchers from George Mason University working with the nonprofit said—if funding reductions proposed by the U.S. House of Representatives go into effect—state economies will suffer and the country could see more than 1 million people unemployed by the end of 2026.
The spending pullback, passed by the House in late January, calls for an $880 billion reduction over 10 years, with Medicaid expected to receive the brunt of the blow. This is all being done to balance tax cuts proposed by Republicans in Congress and President Donald Trump.
In total, the federal government is looking to remove roughly $1.5 trillion from its ledger over the next 10 years. In preparation, the committee that oversees Medicaid has been instructed to find ways to slash $880 billion. Similarly, the committee which funds programs like SNAP was told to eliminate $230 billion.
The Commonwealth Fund’s study is the first glimpse of what the downstream effects of this austerity may look like, with the group predicting state gross domestic products would fall by $113 billion, “exceeding federal budget savings,” which come in at $95 billion annually.
“Combined losses from proposed Medicaid and SNAP cuts would reach $1.1 trillion over a decade, including a $95 billion loss of federal funding in 2026 alone,” the study authors led by Leighton Ku, PhD, health policy research director at George Washington University’s Milken Institute School of Public Health, wrote.
Ku et al. added that roughly “1.03 million jobs would be lost nationwide in healthcare, food-related industries, and other sectors. State and local governments would lose $8.8 billion in state and local tax revenues.”
The healthcare sector alone would see over 477,000 jobs lost in 2026 alone, including at hospitals, clinics and provider networks.
“Because of these losses, fewer health professionals would be available to provide care,” the group wrote. “Some health facilities, like rural hospitals, pharmacies, and nursing homes, might shutter, limiting access even for those who remain insured. Another 411,000 jobs would be lost as the effects extend to other industries, such as retail, construction and manufacturing.”
No sector spared
If SNAP spending also falls sharply, the Commonwealth Fund concluded that state funding would be further reduced by upward of 21%, resulting in hundreds of thousands more jobs being lost, creating a potential financial crisis for states as they struggle to invest in public services and infrastructure.
“About 143,000 jobs would be lost nationwide, including 78,000 direct job losses in food-related sectors such as agriculture, retail grocery, and food processing,” the authors said, adding that restaurants are not factored into their calculation, as they do not benefit from SNAP.
However, the possible damage does not end there. As the ripple effect hits the broader economy, the U.S. could see an additional 65,000 jobs “disappear” across all sectors as the “economic effects of the funding cuts spread.”
While the measurable impact will likely vary from state to state, the group said the service cuts will result in lower spending nationwide, equating to a loss of tax revenue.
“No matter what form they take, any severe cuts in federal funding for Medicaid or SNAP will inevitably inflict economic and employment losses across states,” the Commonwealth Fund concluded.
The full report is available here.
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