Senate Medicaid Cuts Would Add to Job Losses, Economic Fallout

Proposed changes to budget reconciliation bill jeopardize care, economies in rural Pa. communities

June 17, 2025

Sweeping Medicaid cuts proposed by the U.S. Senate Finance Committee would cost Pennsylvania 94,800 more jobs and $12.8 billion more in lost economic impact over the next decade than budget reconciliation legislation passed by the U.S. House.

That’s on top of the already significant economic fallout that would result from the House-passed bill. The Senate committee’s proposed changes to the “One Big Beautiful Bill Act” call for even deeper cuts to Medicaid, including provisions that would more directly destabilize hospital care in rural communities, accelerating care deserts, and, as a result, economic deserts. 

Here are five things to know:

• Economic losses:  If the proposed changes are enacted by the Senate, that would bring the legislation’s total economic toll in Pennsylvania to about 562,100 jobs, $75.8 billion economic impact, and $2.6 billion in lost federal state and local tax revenue over 10 years.
• Senate changes:  While the House bill calls for major cuts that would put health care coverage for more than 300,000 Pennsylvanians at risk and drive up uncompensated care for hospitals, the Senate proposal goes even further. The committee’s changes would directly cut funding that is necessary to keep hospital doors and services open, especially in rural areas, because payments do not reflect the cost of providing care.
  • Medicaid reimburses Pennsylvania hospitals, on average, only 82 cents on the dollar—74 cents in rural communities.
• Ripple effects:  Much of the economic fallout from the legislation would come from the ripple effects that hospital closure or service cuts cause in communities. Of the Pennsylvania jobs lost, about 65,700 would be from hospitals and the rest would come from other industries.
• About the numbers:  These estimates are based on an American Hospital Association (AHA) analysis of the state-by-state impact of each $1 billion loss in Medicaid funding.
• Quotable:  “The Senate Finance Committee reconciliation text calls for drastic and abrupt cuts to Medicaid payments that put Pennsylvanians’ access to care in jeopardy, especially in rural communities,” HAP President and CEO Nicole Stallings said in a statement. “Already struggling hospitals cannot absorb a sudden cut of this magnitude, and some will have no choice but to reduce services or close.”

Learn more online about the vital importance of Medicaid and hospitals to the health and vitality of Pennsylvania communities.