by Clara Bates, Missouri Independent
March 26, 2025

Proposed federal cuts to Medicaid and food assistance could blow a $2 billion hole in Missouri’s budget and cost the state more than 20,000 jobs and hundreds of millions in tax revenue, according to a pair of reports released this week.

Congressional Republicans approved a budget resolution last month to reduce federal spending by $2 trillion as they seek $4.5 trillion in tax cuts. The resolution tasks the committee overseeing Medicaid to cut at least $880 billion over 10 years and the committee overseeing the Supplemental Nutrition Assistance Program to cut at least $230 billion. 

Medicaid cuts could result in 21,600 jobs lost, with SNAP cuts costing another 2,400 jobs, according to a report released Tuesday from the Commonwealth Fund and George Washington University. Those would include jobs in health care and food-related industries.

Federal Medicaid cuts could leave Missouri with huge budget shortfall

In addition to job losses, the report estimates Missouri in 2026 could lose over $1.6 billion in federal Medicaid funding and $356 million in federal SNAP funding. 

“The ripple effect will hit the entire health care system and impact everyone — not just those with Medicaid,” said Joseph Betancourt, president of the Commonwealth Fund, in a statement, “driving more people to emergency rooms and further straining an already overburdened system.”

The budget reductions, job losses and ripple effects could result in $4 billion in lost economic output for the state, the report estimates, and over $500 million in reduced tax revenue.

“Cuts of this magnitude will not be harmless,” said Leighton Ku, lead author of the report and director of the Center for Health Policy Research and professor of health policy and management at George Washington University’s Milken Institute School of Public Health, in a statement.

“In fact, such drastic reductions would harm millions of families and also trigger widespread economic instability and major job losses,” Ku said.

Another report out this week, by the health policy organization KFF, focuses on the potential magnitude of Medicaid cuts on state budgets.

If the $880 billion in cuts were distributed evenly across states over 10 years, that would represent a cut of 39%, as a share of state Medicaid spending per Missouri resident, according to KFF.

The impact of those cuts would be felt more acutely in rural areas of Missouri. 

Timothy McBride, co-director of the Center for Health Economics and Policy at the Institute for Public Health at Washington University in St. Louis, Missouri, said during a briefing on Medicaid in mid-March that financial margins for rural hospitals are “razor-thin.”

“Even in the urban hospitals, they’re probably just a few percentage points, but in rural hospitals, they can be just a percentage point or 2 or negative,” McBride said. “So if you take away the Medicaid dollars, they’re certainly going to go negative. And if you wonder why rural hospitals close, that’s why.”

Medicaid cuts rippling through rural America could bring hospital closures, job losses

States’ options would be to increase taxes, cut other spending programs, cut benefits or pay providers less, according to KFF. Missouri expanded Medicaid to low-income adults in an initiative petition, enshrining eligibility in the constitution, and significant tax increases must be placed on the ballot, meaning either option would require a statewide vote. 

Congress hasn’t yet decided on specific proposals to achieve the proposed cuts. 

Some Republicans have opposed cuts to Medicaid, citing the effect on their constituents. That includes U.S. Sen. Josh Hawley, who told reporters earlier this month: “… I’m not going to vote for something that ends up cutting benefits for people who are working and who qualify for Medicaid.”

According to a KFF survey last year, roughly 70% of Americans want Medicaid to continue as it is today. 

Last month, the director of the state Medicaid program told lawmakers the changes could “present a challenge” for the state budget.

One in every five Missourians is enrolled in Medicaid, or over 1.2 million people. 

Nearly 40% of all Missouri children are covered by Medicaid, which also pays for two-thirds of all nursing home care and 38% of all births.

Medicaid pays for two-thirds of all nursing home care in the state and 38% of all births. 

There are 321,003 families receiving SNAP benefits as of January. 

Missouri Independent is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Missouri Independent maintains editorial independence. Contact Editor Jason Hancock for questions: info@missouriindependent.com.

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