May 22, 2025
Contact: Levana Layendecker, layendecker@pennpolicy.org
House Republicans’ Budget Plan Sets Stage for Largest Cuts to Medicaid, SNAP in Programs’ Histories
Harrisburg, Pennsylvania – Early this morning, the House passed the budget reconciliation bill containing deep cuts to Medicaid and SNAP and tax cuts that mostly benefit the wealthy.
“Almost every step towards the passage of the huge, ugly reconciliation bill has taken place in the middle of the night,” says Marc Stier, the executive director of Pennsylvania Policy Center. “Why? Because the more people know about its provisions, the more horrified they are by it. The changes made this week make it even worse. Extremist Republicans demanded deeper cuts to Medicaid and further tax breaks for the rich. They got them. The so-called moderates who said they would protect Medicaid folded.”
The result is a bill that
- takes away health care from 13 million people nationwide and 588,000 in Pennsylvania.
- takes away food assistance for three million nationwide and at least 120,000 in Pennsylvania and possibly many more.
- could cost the state of Pennsylvania over a billion dollars per year to maintain food assistance.
- increases the deficit by at least $3.8 trillion over ten years.
- could cost the state of Pennsylvania over a billion dollars per year to maintain food assistance.
- increases the deficit by at least $3.8 trillion over ten years.
- tilts our tax system even more heavily in favor of the richest Americans; their taxes will go down, while this bill, combined with Trump’s tariffs, will raise taxes for those with low and moderate incomes.
House Republicans’ bill takes healthcare away from millions, including Pennsylvanians
Medicaid helps children develop into healthy adults and helps adults stay healthy. About 72 million people nationwide, and 3 million in Pennsylvania, receive health coverage through Medicaid. It pays for 2 in 5 births in the U.S. and is the nation’s largest payer both of behavioral health services, which include mental health and substance use disorder treatment, and long-term care services, either at home or in nursing facilities.
However, more than 580,000 Pennsylvanians would lose Medicaid because of the bill’s expansion of work requirements and other red tape. Children, seniors, and people with disabilities, as well as adults, will lose their benefits. Even if people keep their coverage, they might not be able to afford even basic medical treatment due to the plan to impose co-pays.
Coverage losses, benefit cuts, and reduced provider reimbursement rates mean that parents will not be able to afford life-saving medications, older adults won’t be able to pay for treatment to manage chronic conditions like cardiovascular disease and liver disease, and people working low-paying jobs won’t be able to get care for acute illnesses.
House Republicans’ bill takes food assistance away, too
These challenges to Pennsylvanians’ health will be compounded by the cuts to SNAP. With grocery prices going up year after year, and forecasted to rise further, 193,000 people in Pennsylvania could see their food assistance benefits cut or taken away entirely under the House Republicans’ plan to expand work requirements to older adults and parents of school-aged kids. Taking away benefits from parents will harm children, too. Kids won’t get enough to eat, and their health and school performance will suffer.
House Republicans have also imposed steep new costs on states, who will be forced to pay a minimum of 5% and up to 25% of SNAP benefits. In Pennsylvania that would be between $250 million and $1 billion per year. States will also face a much higher cost to administer the SNAP program. With our budget stretched thin, Pennsylvania lawmakers will be forced to choose between taking away benefits, reducing eligibility, raising taxes, or cutting funding for other state programs such as K–12 education and repairing our roads and bridges.
The bill could even end SNAP entirely in some parts of the country if a state decides the new funding mandate is impossible to meet and opts out of the program. If Pennsylvania were to end SNAP, two million people, or 15% of Pennsylvanians, could see their benefits taken away, including working people with low-paying jobs, people with serious health conditions and disabilities, veterans, and others, who would face severe hunger and health consequences.
Reckless tax cuts for the wealthy will increase deficits
The $1.5 trillion in cuts to the safety net over ten years pay for tax cuts that disproportionately benefit the wealthy. But even with the dismantling of federal funding for food assistance and health care, the current plan would still increase deficits by $3.8 trillion over 10 years. Low-income, working families in Pennsylvania, on the other hand, will see next to nothing from the tax cut provisions.
- While the bill temporarily expands the maximum Child Tax Credit to $2,500, up to 20 million children in working families won’t get the full credit because their families’ incomes are too low.
- In addition, millions of low- and moderate-income people will see tax increases because of Trump’s tariffs.
- SNAP has an economic multiplier effect, generating $1.54 in economic activity for every $1.00 spent in a weak economy. The 10,451 local grocery chains and convenience stores that rely on SNAP purchases to keep their businesses afloat, pay their employees, and keep prices affordable might struggle to stay open.
- One in four small business owners count on food assistance through SNAP or health care coverage through Medicaid in Pennsylvania. Without help affording groceries and health care, many entrepreneurs could be forced to close up shop.
Medicaid and SNAP are safety net programs for people who are having temporary difficulties
While 3 million Pennsylvanians benefit from Medicaid and 2 million from SNAP at any one time, people move off and one these programs all the time. People who have lost a job, or become ill, or have to work less to cope with new responsibilities taking of children or elderly relatives, take advantage of these programs for a time. And then when their circumstances change and they again work at job paying a higher wage and giving them health insurance, they leave them.
The result is that the number of people who benefit from Medicaid and SNAP over ten years is more than double or triple the number who do so at one time—perhaps as many as 6 million for Medicaid and 4 million for SNAP.
And, if we are lucky, as many as 60% of us are going to need Medicaid to help pay for an assisted living residence, nursing home, or in-home care when we are elderly.
Medicaid and SNAP are critical to ensuring that health care facilities and grocery stores survive
Research shows that tax cuts for the wealthy don’t “trickle down.” Instead, the dramatic cuts to federal funding for basic needs programs will be felt far beyond the households who see their benefits taken away.
• Medicaid is an important source of revenue for hospitals in rural areas because it reduces uncompensated care rates. Rural hospitals, in places such as Elk and Tioga Counties, could shut down, leaving nurses, doctors, and support workers without jobs.
• SNAP has an economic multiplier effect, generating $1.54 in economic activity for every $1.00 spent in a weak economy. The 10,451 local grocery chains and convenience stores that rely on SNAP purchases to keep their businesses afloat pay their employees and keep prices affordable might struggle to stay open.
• One in four small business owners count on food assistance through SNAP or health care coverage through Medicaid in Pennsylvania. Without help affording groceries and health care, many entrepreneurs could be forced to close up shop.
State governments also rely on federal support, and Pennsylvania receives more than $46 billion annually in federal funding. The state cannot possibly make up for the funding it would lose for Medicaid and SNAP without making deep cuts elsewhere in the budget, to K–12 education, to roads and bridges, and to public safety.
The House reconciliation bill is a disaster for working people and the middle class and a huge reward to the very rich—which doesn’t help the rest of us.
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