'The last thing our country needs': The door has been opened to big Medicaid and SNAP cuts — how this could affect your finances and what you can do to prepare

A potentially dire situation

Roughly 72 million Americans were enrolled in Medicaid as of November. Meanwhile, an estimated 41 million people received SNAP benefits in fiscal year 2024. Given such high enrollment levels, cuts to both programs could have far-reaching consequences.

A reduction in SNAP benefits could leave millions of households without access to adequate food or nutrition. The Department of Agriculture reports a whopping 18 million households were food insecure at some point during 2023. And food insecurity impacted almost 18% of households with children that year.

Families removed from SNAP could lose a number of key benefits, including access to free or affordable school meals and the Summer EBT program, which can provide a subsidy to help feed children when school is not in session. Advocates also fear food programs not tied directly to SNAP could feel the ripple effects of any cuts.

Meanwhile, cuts to Medicaid could result in millions of Americans losing access to critical care services. Low-income households unable to afford private insurance could find themselves plunged into an even deeper financial hole as they scramble to address health care needs as they arise.

Cuts to Medicaid and SNAP may also harm state economies, according to research from the Commonwealth Fund. Not only are employees who work for these programs at risk of losing their jobs, but the impact could trickle down to related businesses.

The Commonwealth Fund estimates that states’ gross domestic product (GDP) could be $95 billion smaller and total economic output lost would be about $157 billion, if Medicaid cuts come to life. SNAP cuts could cost states nearly $18 billion in GDP and total economic output could be $30 billion lower.

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How to prepare for potential cuts

Although we don’t yet know the fate of Medicaid and SNAP, as well as how deep cuts might be, if you benefit from these programs it may be a good time to prepare an action plan.

Talk to your health care provider about medication assistance programs, and start researching marketplace health insurance plans to see if buying coverage is feasible. There may also be health clinics in your community that offer low-cost care or care on a sliding-scale basis tied to income.

At the same time, explore resources in your community for food access, whether it's food banks, soup kitchens or programs run by local houses of worship. Local charities may also be able to provide assistance if you lose some of your food benefits.

You can also experiment with different ways to save money on food. That could mean taking advantage of a discount grocery store or turning to your local dollar store to load up on non-perishable supplies.

Finally, do your best to cut back on spending to free up more money for essential needs like food and health care. It may not be easy to do, as you may already be on a tight budget. But a close examination of your expenses might reveal a few small opportunities to cut back.