NEW YORK, June 21, 2025
Healthcare sector faces potential job losses
Proposed budget cuts could destabilize one of the economy’s strongest sectors.
Health insurance cuts could slash hundreds of thousands of healthcare jobs.
- proposed budget cuts could eliminate nearly 500,000 healthcare jobs over the next decade.
- Expiration of ACA tax subsidies could lead to an additional 140,000 job losses.
- Rural healthcare providers and community health centers are especially vulnerable.
- Healthcare has been a consistently strong area of the job market, offsetting losses in other sectors.
The looming question is: How many healthcare jobs could be lost due to proposed health insurance cuts? The answer is that nearly 500,000 healthcare jobs are at risk over the next decade due to proposed cuts to Medicaid and the potential expiration of Affordable Care Act tax subsidies.
Ripple effect on jobs
President Donald Trump‘s proposed cuts to health insurance programs, currently being considered by Congress, could put hundreds of thousands of healthcare jobs at risk. This threatens to destabilize one of the U.S. job market’s few strong sectors.
Congressional Republicans are pushing a budget plan that, according to Congressional Budget Office estimates, would cause nearly 8 million people on medicaid to lose their health insurance coverage. An additional 2 million people could lose coverage through the Affordable Care Act if Congress allows health insurance tax subsidies to expire at the end of the year.
Less funding for Medicaid and fewer insured individuals would decrease doctor’s office visits, prescription refills, and medical procedures. Consequently, fewer workers would be needed to support these services.
According to a separate analysis from George Washington University, the expiration of the ACA tax subsidies, enacted in 2021, would result in the loss of an additional 140,000 jobs.
Expert opinion
“Hospitals will close, health centers will close, pharmacies in some parts of the country will close because they will lose revenue,” said Leighton Ku, director for the Centre for Health Policy Research at George Washington University, who worked on the analyses. “Ther are going to be job losses, and we’re talking about middle class jobs being lost.”
Healthcare’s role in the job market
The potential job losses would strike a blow to one of the steadiest areas of the job market in recent years. The Bureau of Labor Statistics reported that healthcare accounted for nearly half of the jobs added in the U.S. in May.
An analysis by S&P Global indicated that approximately half of the 2.2 million jobs added to the economy last year were in healthcare-related sectors. This has helped offset job cuts and stagnant growth in other sectors, such as retail and manufacturing.
“Right now, a lot of what is driving these positive headline numbers and bolstering the labor market is the health care sector,” said Allison Shrivastava, an economist with Indeed.com. “it’s something that has been a constant. The health care sector has been a pretty big mainstay as the rest of the labor market has cooled.”
The “Big Gorgeous Bill Act”
The health insurance provisions are part of a broader spending bill that has passed the House and is currently being considered in the Senate. Republicans have dubbed the legislation the “Big Beautiful Bill Act.”
The bill would cut around $800 billion from Medicaid to offset some of the $4 trillion in tax cut extensions for individuals and corporations.
A version of the bill currently in the Senate would further reduce Medicaid spending by limiting states’ use of taxes on hospitals and other healthcare providers that help fund their share of the Medicaid program. The Senate plans to begin voting on the legislation next week.
Rural areas at risk
The cuts would particularly affect healthcare providers in rural areas,where patients are more likely to be insured through Medicaid than those in metro areas. Georgetown University researchers found that 40% of children in small and rural towns receive their health insurance from medicaid.
A report this month from the Center for Healthcare Quality and Payment Reform stated that one-third of all rural hospitals in the country are already at risk of closing due to financial difficulties.
Community Health Centers, which employ more than 300,000 workers and receive federal funding, are also at risk. These centers serve at least 32 million mostly lower-income patients a year and derive about 40% of their revenue from medicaid.
“Our health centers operate on razor-thin margins, so any kind of disruption in payments or reimbursements, even for a short time, can have a significant impact,” said Joe Dunn, chief policy officer for the National Association of Community Health Centers. “About 40% of health centers are in rural America, and oftentimes they are the only primary care in that community. We have health centers in towns of a few hundred people, and there may not be any other kind of health care network there.”
Hiring momentum
Absent any policy changes from Congress,the healthcare sector had appeared poised for continued growth,largely insulated from wider concerns about tariffs and an economic slowdown.
Shrivastava noted that the number of job postings for doctors and surgeons on indeed.com are about 90% higher than their pre-pandemic levels. Listings for home health aides are up 46%, and openings for nurses are up 16%.
Data from ZipRecruiter indicates that healthcare job postings represent 27% of all active job listings, with healthcare postings beginning to make up a larger share of new job postings.
The loss of hiring momentum from funding cuts would remove a positive driver for the job market.
“Right now, the labor market as a whole is a
Beyond Job Losses: The Broader Economic Impact of Healthcare Cuts
The potential loss of healthcare jobs is only one piece of a larger economic puzzle. Proposed cuts to health insurance programs could have far-reaching consequences,impacting various sectors and the overall economic health of communities. The ripple effects of these cuts extend beyond the healthcare industry itself, potentially impacting state economies and the availability of essential services. This is because the proposed legislation, dubbed the “Big Beautiful Bill Act,” seeks to alter the financial landscape of healthcare, with far-reaching implications.
One significant area of concern is the decrease in consumer spending.Fewer insured individuals translate to fewer medical appointments, prescriptions, and procedures. This reduction in demand can impact local pharmacies, medical supply stores, and other businesses that rely on healthcare spending. Moreover, reduced access to care could mean people delay necessary treatments, which could lead to a decline in individual health and further strains on the healthcare system down the line. This has the potential to impact the entire economy,not just the healthcare sector that employs a significant percentage of Americans.
Additionally, consider the impact on state budgets. Medicaid is a significant expense for states, jointly funded with the federal government. Cuts to federal funding would likely force states to make difficult choices – either cut their own healthcare spending, raise taxes, or reduce funding for other vital programs like education and infrastructure. This could trigger a downward spiral, where reduced funding leads to fewer jobs in essential services in a variety of states.
the healthcare sectorS role as an employer is also critical. As highlighted earlier, healthcare has been a consistent job creator, offsetting losses in other areas. Reduced hiring, or even job losses, in healthcare could exacerbate existing economic challenges, especially in rural areas where healthcare providers are frequently enough the largest employers. Furthermore,the loss of jobs will lead to reduced tax revenue for both state and federal government.
Examining the Specifics: Medicaid and ACA Cuts
The proposed cuts primarily target Medicaid, a joint federal-state program providing healthcare to over 80 million Americans. The “Big beautiful Bill Act” aims to reduce Medicaid spending by around $800 billion, primarily by limiting federal contributions. Such cuts could lead to a decrease in Medicaid enrollment, potentially impacting patients and their access to critical health services.
The expiration of Affordable Care Act (ACA) tax subsidies would further impact healthcare providers and the overall job market. healthcare job losses could exacerbate economic challenges in the healthcare industry and states.
Specifically, the following groups are most at risk:
- Low-Income Individuals: ACA subsidies help make insurance affordable for many, but the expiration could significantly increase premiums and deductibles, leading people to forgo coverage and care.
- Rural Communities: Frequently enough, the only medical facilities in small towns are community centers. If these centers close from lack of funding, residents may be left without access to care.
- Children: 40 percent of children in rural areas receive coverage through Medicaid, so cuts could impact the health of a lot of children.
These measures could be detrimental for the economy.
Finding Solutions: What Can Be Done
While the situation appears challenging, several potential solutions emerge. Policymakers and stakeholders could take several steps to mitigate economic disruption.One critical step is to increase awareness and understanding among voters, elected officials, and healthcare providers by spreading data and providing insight.
Here’s what could be done:
- Advocate for Policy Changes: Contacting elected officials to express concerns about the proposed cuts and advocate for alternative solutions is essential.
- promote Innovative Healthcare Models: Support and encourage healthcare models that improve efficiency while maintaining quality, such as telehealth and preventive care.
- Invest in Workforce Progress: Advocate for programs that support healthcare workers and that enhance their skills, such as education.
- Engage in Community Support: Local stakeholders, communities, and local governments must come together to identify unique local remedies or solutions to healthcare access.
furthermore, a bipartisan approach is crucial. Finding common ground and compromising on healthcare policy can lead to more enduring solutions.The future of the healthcare sector and its economic impact depend heavily on the decisions currently being made. The proposed budget cuts pose a serious threat to job growth and economic stability. The future of healthcare jobs and broader economic prosperity could hinge on these decisions.
Frequently Asked Questions
Here are some common questions about the proposed healthcare cuts and their potential effects:
Q: How will these cuts affect healthcare access?
A: Reduced funding could lead to higher costs,restricted coverage,and fewer providers,making it harder for people to access necessary care.
Q: What happens to all the healthcare-related positions that might be cut?
A: The healthcare sector could see widespread layoffs of doctors, nurses, and support staff, adding to the existing unemployment issues.
Q: Are health centers at risk of closure?
A: Yes. Many health centers in at-risk communities operate on razor-thin margins. These cuts would likely lead to closures and reduced services.
Q: What are the potential long-term impacts of these cuts?
A: Over time,these cuts could lead to a sicker population,increased healthcare costs,and a decline in the overall quality of life.
Table of Contents
- Healthcare sector faces potential job losses Proposed budget cuts could destabilize one of the economy’s strongest sectors.
- Ripple effect on jobs
- Healthcare’s role in the job market
- The “Big Gorgeous Bill Act”
- Hiring momentum
- Beyond Job Losses: The Broader Economic Impact of Healthcare Cuts
- Frequently Asked Questions
