Proposed cuts to health insurance programs in a budget bill backed by President Donald Trump could jeopardize hundreds of thousands of health care jobs, a crucial segment of the U.S. job market that has shown notable strength in recent years.
Congressional Republicans are pushing a budget plan that could lead to nearly 8 million Medicaid recipients losing their health insurance coverage, according to estimates from the Congressional Budget Office.
Additionally, if Congress allows the expiration of health insurance tax subsidies provided by the Affordable Care Act at the year’s end, another 2 million people may be affected.
The anticipated reduction in Medicaid funding and the potential drop in insured individuals are projected to lead to decreased doctor visits, fewer prescription refills, and reduced medical procedures, ultimately resulting in a diminished need for health care personnel.
An analysis by George Washington University and the Commonwealth Fund estimates a potential loss of nearly 500,000 health care jobs over the next decade due to these cuts.
Moreover, the expiration of ACA tax subsidies could bring about an additional 140,000 job losses, further complicating the job landscape in health care.
Leighton Ku, director for the Center for Health Policy Research at George Washington University and one of the analysts on the report, stated, “Hospitals will close, health centers will close, pharmacies in some parts of the country will close because they will lose revenue.”
“What we’re talking about are significant job losses, affecting middle-class positions.”
These potential job losses would strike a significant blow to one of the few consistently strong areas of the job market.
In May, health care accounted for nearly half of the jobs added in the U.S., according to the Bureau of Labor Statistics.
Last year, approximately half of the 2.2 million new jobs created were in health care-related sectors.
This growth has been crucial in offsetting job cuts and stagnation in other industries such as retail and manufacturing.
Allison Shrivastava, an economist with job listing site Indeed.com, commented, “Right now, a lot of what is driving these positive headline numbers and bolstering the labor market is the health care sector.
It’s something that has been a constant, and the health care sector has been a pretty big mainstay as the rest of the labor market has cooled.”
The health insurance changes are part of a comprehensive spending bill that has already passed the House.
The legislation, referred to by Republicans as the “Big Beautiful Bill Act,” intends to cut about $800 billion from Medicaid, which serves low-income and disabled individuals.
This reduction is aimed at offsetting part of the $4 trillion in tax cut extensions included in the bill for both individuals and corporations.
Current Senate proposals to vote on the legislation may even further truncate Medicaid funding by restricting states’ ability to levy taxes on hospitals and health care providers that help finance their Medicaid contributions.
These cuts are expected to disproportionately impact health care providers in rural regions, where patients are likely to rely on Medicaid for their insurance coverage more than their counterparts in urban areas.
Research from Georgetown University indicates that around 40% of children in small and rural towns are covered by Medicaid.
Currently, a third of rural hospitals face financial risks that could lead to closure, as noted in a report from the Center for Healthcare Quality and Payment Reform.
Also at risk are Community Health Centers, which employ over 300,000 individuals and derive a significant portion of their funding from federal support.
These centers provide services to at least 32 million primarily low-income patients annually, with about 40% of their revenue coming from Medicaid.
Joe Dunn, chief policy officer for the National Association of Community Health Centers, explained, “Our health centers operate on razor-thin margins, so any sort of disruption in payments or reimbursements, even briefly, can have a major impact.”
He further emphasized that 40% of health centers are situated in rural America, frequently being the primary care providers in those communities.
“Many of our health centers are located in towns with a few hundred residents, often being the only healthcare network available,” Dunn noted.
In the absence of policy adjustments from Congress, the health care sector appeared ready for continued expansion, remaining largely insulated from concerns about tariffs and economic slowdowns.
Job postings for doctors and surgeons on Indeed.com have surged to approximately 90% above pre-pandemic levels, while listings for home health aides and nurses have risen by 46% and 16%, respectively.
Health care job listings on ZipRecruiter.com now comprise 27% of all active job postings, and the share of new job postings attributed to health care is growing.
The loss of momentum in hiring resulting from funding cuts could eliminate this critical positive influence on the job market.
As Shrivastava succinctly stated, “Right now, the labor market as a whole is arguably in a stagnant position.
People are hesitant to leave their jobs, worried they won’t find new employment, and companies are cautious about hiring.
Health care has been the exception to that trend.”
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