Republican U.S. Sens. Bernie Moreno and Jon Husted say President Donald Trump’s One Big Beautiful Bill Act will help average Ohioans. But a panel of Ohio economists was nearly unanimous in saying the bill’s Medicaid cuts would be bad for the state’s economy.
A majority, however, wouldn’t go so far as to say that by themselves they would cause a severe recession.
The survey by Scioto Analysis was released on Monday. It comes after the July 4 signing of the One Big Beautiful Bill Act.
The law gives $1 trillion in tax cuts to the richest 1%. It also balloons the deficit by $3.4 trillion, according to the nonpartisan Congressional Budget Office.
In addition, it makes unprecedented cuts to the social safety net. It slashes nearly $1 trillion in Medicaid spending over 10 years.
Ohio will lose about $37 billion over that period, according to estimates by KFF. The Trump bill will also slash another $230 billion in federal food assistance over the same period.
KFF said that most of the Medicaid savings will be achieved through work requirements that take effect in January 2027 — just after the November midterm elections.
Medicaid recipients and their advocates say that the savings won’t be from people going to work and making enough money that they no longer need Medicaid. Instead, they say, the requirements will create additional red tape that forces the needy off of the system.
Ohio emergency room docs say that by law they have to care for anybody with a medical emergency. KFF estimates that the law Trump signed will create 440,000 more uninsured Ohioans.
Those people aren’t going to stop getting sick and injured, and hospitals will have to pay to care for those who show up in their emergency rooms. ER docs say the increase in uncompensated care will affect everybody in the form of longer waits to be seen, longer times “boarding” in the ER waiting for a bed in the appropriate department, and staff cuts across the hospital.
Each of those things has been linked to worse patient outcomes and increased mortality.
The economists surveyed by Scioto Analysis said that by making Ohioans sicker, the Medicaid cuts would bleed the state economy. They were asked whether they agreed that “Reducing Medicaid spending in Ohio by $37 billion over the next ten years will have significant economic ramifications beyond loss of health insurance for current Medicaid recipients.”
Nineteen of 20 said yes. And the 20th — David Brasington of the University of Cincinnati — said he was uncertain.
In the comment section of the survey, several economists said making many sicker and less able to work will harm all Ohioans.
“Denying health care may reduce the supply of labor,” wrote Charles Kroncke of Mount St. Joseph University. “If people are unhealthy, they will not be able to work.”
Albert Sumell of Youngstown State University said it’s been studied. The “externalities” — the impact on others of taking health insurance away from some — are bad.
In the comment section of the survey, several economists said making many sicker and less able to work will harm all Ohioans.
“Denying health care may reduce the supply of labor,” wrote Charles Kroncke of Mount St. Joseph University. “If people are unhealthy, they will not be able to work.”
Albert Sumell of Youngstown State University said it’s been studied. The “externalities” — the impact on others of taking health insurance away from some — are bad.
“It’s been well documented that there are significant negative externalities associated with loss of health insurance, including economically,” he wrote.
One of the negative externalities that several economists referred to is increased financial stress on already-struggling rural hospitals.
“Rural hospitals may be forced to close, along with other medical offices, leading to widespread job losses in the healthcare sector,” wrote Rachel Wilson of Wittenberg University. “The resulting decline in income will ripple through the broader economy, reducing consumer spending and local economic activity.”
She added, “Additionally, a rise in the number of uninsured individuals may lead to a less healthy workforce, which could negatively impact productivity. Cuts to Medicaid may also reduce access to mental health services, potentially contributing to higher crime rates — another factor that can dampen economic growth.“
Meanwhile, Husted and Moreno — Ohio’s senators — are promoting claims that the state’s rural hospitals will actually do better under the One Big Beautiful Bill Act, which they both supported.
Late in the legislative process, $50 billion was built into the bill to support rural health, of which the senators say Ohio would get $1.3 billion. However, KFF on July 24 estimated that the law will cost Ohio $5.6 billion in Medicaid funding to rural areas — more than quadruple the amount of new funding touted by Moreno and Husted. And that doesn’t count the $31 billion in Medicaid losses to non-rural areas or funding cuts to programs under the Affordable Care Act.
Even so, the CEO of one rural hospital chain is claiming that his organization will be better off under the One Big Beautiful Bill Act, and the Ohio Hospital Association continues to praise the rural funding built back into the bill. The hospital association won’t answer directly when asked whether, on a net basis, Ohio hospitals will gain or lose under the law.
While the economists in the Scioto Analysis survey were nearly unanimous that the Medicaid cuts will harm the Ohio economy, most didn’t think they would cause a severe recession.
They were asked whether they agreed that “Reducing Medicaid spending in Ohio by $37 billion over the next ten years will cause a severe recession in the state.” Eleven disagreed, five agreed and three were uncertain.
Of those who disagreed that the cuts would cause a severe recession, many said there will be bad effects, but the amounts in question aren’t big enough to crash the entire state economy by themselves.
“This is less than $4 billion per year or under one half of 1% of Ohio’s GDP,” said Bob Gitter of Ohio Wesleyan University. “The effect will be negative but won’t cause a severe recession.”
Another economist noted that the Medicaid cuts are taking place in the context of a whopping dose of deficit spending.
“Yes, the Medicaid cuts would (be) recessionary if I take the question literally and ignore the context, but they are part of the Big Beautiful Bill, which also includes massive inflationary tax cuts, so the net result is mainly redistribution from the sick to the rich and not austerity,” said Jonathan Andreas of Bluffton University. “In fact, the Big Bill is more inflationary than recessionary because it blows up the deficit.”
On the other hand, Iryna Topolyan of the University of Cincinnati said the Medicaid cuts would cause some sort of recession because of the centrality of health spending to the overall economy.
“I am not certain about the severity of recession, but I am fairly confident that this cut will spur recession,” she said. “The direct effect of reduced spending on medical services, amplified by the multiplier effect, will be observed in the short run. Moreover, there will be economic loss due to sick days as a result of poorer health. Additionally, in the long run, there will be a negative effect of deteriorating human capital due to worse health outcomes.”
