Key Takeaways
- The One Big Beautiful Bill will result in nearly $1 trillion in cuts to Medicaid, which will weigh on overall economic prosperity.
- The annual economic impact of cuts to the program are estimated to result in more than 300,000 jobs lost and $135 billion in reduced economic output by 2034, according to a new study.
- These cuts will disproportionately impact rural communities, as hospitals tend to employ a large number of residents in these areas.
Medicaid cuts won’t just hurt health care in America. They’ll result in severe economic consequences throughout the nation.
The $1 trillion in cuts to the program, as specified in Trump’s One Big Beautiful Bill, will hurt hospitals, nursing homes, clinics, emergency rooms, and other health care facilities. They will also deliver a huge blow to the nation’s economic prosperity.
A new study from the American Medical Association determined that by 2034, the Medicaid cuts could reduce U.S. economic output by as much as $183 billion and lead to 408,000 job losses.
The office of New York Gov. Kathy Hochul estimates that her state will lose 65,000 jobs due at hospitals and other health facilities, half of which would be in New York City alone. It also anticipates a loss of $14.4 billion in hospital-related economic activity.
However, Medicaid cuts will disproportionately affect economies in rural communities. Rural hospitals and health systems make up about 35% of all hospitals across the country, and on average, they account for 14% of total employment in rural communities.
Now over 700 rural hospitals across the country are currently at risk of closing.
And according to the Bipartisan Policy Center (BPC), the average critical access hospital—a hospital designated by Medicare to give health care access to rural communities—employs 127 full and part-time employees, and has a payroll of around $6 million.
“Hospitals are directly tied to the financial prosperity and the health prosperity of rural communities, and we’re going to be upending that,” said Rich Rasmussen, president and CEO of the Oklahoma Hospital Association.
“When you disrupt [a hospital’s] ability to support the financial vitality of that community, it will lead to folks rolling up Main Street and relocating,” he added.
When facilities reduce services or close altogether, local residents will be forced to seek out both new jobs and new health care providers elsewhere — most likely in urban areas.
That will ultimately lead to more people relocating, according to BPC, effectively taking their money and business out of small communities that need it most.
“That will contribute to the further demographic change and the potential for rural decay across our country,” Rasmussen said.