Millions of low-income Americans are facing the risk of losing access to essential healthcare and food assistance as lawmakers propose cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP). The move could tear apart the two systems that protect vulnerable families, deepen poverty and exacerbate health disparities, thus destabilizing already struggling communities.
One in five Americans will be affected
Medicaid and SNAP are two of the most important lifelines in the U.S. social safety system. They have long been viewed as anchors for entire communities, schools, and families.
- Medicaid provides free healthcare coverage to over 80 million Americans – one in five people in the country. It also covers over 40-50% of all births in the U.S.
- SNAP helps over 42 million families, including one in five children, access the food they need to survive.
Public benefits cut to benefit the wealthy?
In February, the House of Representatives passed a tax blueprint that provided US$4.5 trillion in tax cuts over 10 years. To cover this, Republican lawmakers proposed US$1.5 trillion in spending cuts, including:
- US$880 billion from Medicaid
- US$230 billion from SNAP
If the proposed cuts come into force, they would be one of the largest rollbacks of public benefits in U.S. history, benefiting the wealthy while impacting states and vulnerable communities.
Ripple effects on the U.S. economy and states
Experts warn that the announced cuts would lead to the loss of over 1.3 million jobs, including 286,000 in 2026. Most of those job losses would affect the healthcare, food, and other service industries.
State Gross Domestic Product would drop by US$113 billion, far exceeding federal budget savings. In addition, over a decade, the cuts to Medicaid and SNAP could result in US$1.1 trillion in losses, with US$95 billion in lost federal funding in 2026 alone.
The cuts will impact thousands of hospitals, supply chains, and the economies of all 50 U.S. states and Washington, D.C.
In addition to this, the cuts will widen economic disparities for people of color and children. Over 13 million Black Americans (29% of the black population) and 19 million Hispanic Americans (29.6% of the Hispanic population) rely on Medicaid, compared to 12.9% of whites and 17.4% of Asians. Republican-backed tax cuts favoring affluent households may reduce benefits for these recipients.
Heavy burden on states and taxpayers
Medicaid covers 19% of all healthcare spending and 19% of hospital spending in the U.S. It provides essential benefits, including prescription drugs, home care, and long-term care, covering 61% of total long-term care spending. Medicaid also offers additional services such as non-emergency medical transport and comprehensive benefits for children.
As Medicaid relies heavily on federal funding and SNAP nutrition benefits are fully federally funded, the planned cuts could have far-reaching consequences, potentially putting pressure on state economies and disrupting essential services.
Cutting these programs will increase food insecurity and worsen health outcomes, leading to higher costs for taxpayers. It will also shift healthcare costs to state governments and hospitals, thus increasing uncompensated care costs for taxpayers.
Allegations of improper use of funds vs large-scale support
Claims of Medicaid fraud appear to have no grounds. The 2024 Medicaid improper payment rate was 5.09%, down from 8.58% in 2023, mainly due to insufficient documentation and incorrect program assignment. According to KFF’s tracking poll, about 75% of Americans view Medicaid favorably, with 63% of Republicans, 81% of independents, and 87% of Democrats holding this view. This positive perception reflects the program’s broad support across party lines.
Recently, Democrats have been pushing back against Republican plans to cut Medicaid and SNAP funding. In response, they have introduced the Hands Off Medicaid and SNAP Act to safeguard these programs.
