California Could Lose Up to 217,000 Jobs if Congress Cuts Medicaid
Press Coverage
Republicans are considering major cuts to Medicaid to offset tax cuts. Depending on the specific mechanisms and timing for cutting Medicaid, California could expect to see between $10 billion and $20 billion fewer federal dollars per year coming to Medi-Cal, the state’s Medicaid program.
These federal cuts not only threaten health care access for many of the nearly 15 million–or one out of three–Californians currently enrolled, they would also lead to significant job loss in health care and other sectors given that health care is a key part of California’s economy, and Medi-Cal is a key pillar in California’s health care system.
We analyzed the loss of $10 billion to $20 billion in federal Medi-Cal funding in 2026 and find that it would result in:
- Between 109,000 and 217,000 lost jobs,
- $18.5 billion to $37.0 billion in reduced economic output, and
- $860 million to $1.7 billion in reduced state and local tax revenue.
Approximately two-thirds (67%) of the lost jobs would be in health care sectors, including jobs at hospitals, clinics and doctors’ offices, nursing homes, other health care settings, insurance companies, and in home care. The remaining one-third of jobs lost due to federal cuts to Medi-Cal would occur at businesses that supply the health care industry, such as food, laundry, and building services, medical supply companies, employment agencies, and accounting firms, and at local businesses at which health care workers spend their income, such as restaurants and retail stores.
The policy brief includes estimates of jobs lost by county and Congressional District.
Drastic federal Medicaid cuts would not only eliminate or limit health care access for millions of Californians, it would also throw hundreds of thousands of Californians out of work and hurt local economies during a time when economists are already on watch for a potential recession caused by changes in federal policy.
Read the full policy brief here.
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