CALIFORNIA – A new report published by the Commonwealth Fund, on March 25, found that federal Medicaid and Supplemental Nutrition Assistance Program (SNAP) cuts could result in 140,000 million jobs lost in California and the state’s GDP falling by $17 billion in 2026.
The fund, in partnership with George Washington University, warns that potential budget cuts to the programs could trigger severe economic consequences across all 50 states and the District of Columbia.
“Medicaid and SNAP programs are not just designed to strengthen individual health and nutrition — they support the economic well-being of communities and businesses nationwide,” said lead author Leighton Ku.
Reductions in federal funding for Medicaid and SNAP reduce revenue for businesses like hospitals, doctors’ offices, pharmacies, grocery stores, and their employees.
These cuts also impact businesses and workers in their supply chains, including medical equipment suppliers, food producers, and farms, creating a ripple effect throughout the economy.
California could experience the highest number of job losses
The U.S. House of Representatives’ budget plan suggests cutting at least $880 billion over the next 10 years from programs handled by the House Energy and Commerce Committee and at least $230 billion from programs under the House Agriculture Committee.
The report suggests that Medicaid and SNAP are likely to be the primary targets for budget reductions.
The proposed cuts are still being worked out in upcoming laws, so the analysis looks at the overall effects of broad funding cuts instead of focusing on specific, final reductions.
The researchers found that California could experience the highest number of job losses, totaling 140,000. Of these, 122,000 could result from reductions to Medicaid, while 18,000 could stem from cuts to SNAP.
Following California, the states with the highest potential job losses are New York with 82,000, Texas with 67,500, Pennsylvania with 48,700, and Florida with 44,900.
Photo credit: Commonwealth FundEconomic ripple effect
The report said that as hospitals, healthcare providers, and grocers lose money, they’ll have to cut jobs and services, which will then hurt other parts of the economy too.
Fewer jobs and lower wages would mean people spend less, which would impact businesses in many different areas.
The researchers said this could result in California’s GDP decreasing by $17 billion.
With people spending less, state and local governments would get less in taxes, making it harder for them to pay for important services.
The state could lose $1.4 billion in tax revenue from combined Medicaid and SNAP cuts.
To read the full report visit https://www.commonwealthfund.org/publications/issue-briefs/2025/mar/how-cuts-medicaid-snap-could-trigger-job-loss-state-revenue
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