The US House of Representatives has passed a signed bill that will reduce spending on Medicaid. (Getty Images)
With the federal government and states set to cut Medicaid by about $1 trillion over the next decade, researchers estimate an annual impact by 2034 of hundreds of thousands of job losses and billions in fewer state and local tax revenues.
The tests published this month in the peer-reviewed journal JAMA Health Forum examined the long-term economic effects of the Medicaid provisions in President Donald Trump’s signed Tax and Spending Act, which cuts the joint state-federal health insurance program for people with lower incomes or disabilities and provides tax cuts that disproportionately benefit wealthier people Americans.
By 2034, researchers estimated the annual economic impact would be 302,000 lost jobs and $135.3 billion in reduced economic output, leading to $11.1 billion in annual tax revenue cuts at the state and local levels.
The study found that coverage losses could generate $7.6 billion in medical debt, resulting in a further $3.8 billion reduction in economic activity.
Cuts to Medicaid are likely to worsen mental health care in rural America
as largest source of health insurance in a country of 72 million people – or one-fifth of the U.S. population – Medicaid is a key source of revenue for health care providers as well as a significant funding stream for health care facilities. Hospitals are major employers and the driving force of the local economy.
IN New Yorkfor example, Democratic Gov. Kathy Hochul’s office estimates that cuts to hospitals and community health centers could result in 65,000 job losses and a loss of $14.4 billion in hospital-related economic activity.
Stateline reporter Shalina Chatlani can be reached at: schatlani@stateline.org.
