In May, the U.S. House of Representatives passed a budget reconciliation bill that includes significant cuts to Medicaid. Specifically, the Congressional Budget Office estimates that the legislation would lead to more than $700 billion in cuts to Medicaid, and nearly 11 million people losing coverage, including nearly 8 million people who rely on Medicaid. The bulk of these reductions would come through work requirements.

A common misconception about Medicaid is that it is simply a standalone program that provides health insurance to Americans living below or near the federal poverty level. In reality, communities and small businesses rely on the stability it brings. Here are five ways Medicaid supports Main Streets across America.

Many small businesses have tight budgets and struggle to provide basic benefits, much less comprehensive health insurance to all employees. This is especially true in underserved communities, with part-time or low-wage workers being impacted the most. Medicaid provides coverage to employees who may not qualify for employer-sponsored insurance. This ensures that workers have access to preventive care, which reduces absenteeism and improves productivity. It also lowers the burden of medical debt among workers, giving them better financial stability.

Medicaid’s healthcare safety net allows more people to enter or remain in the workforce. This also allows more entrepreneurs to take the risk of starting a business, knowing their families are covered. In addition, this support also increases the number of individuals they can hire in their communities.

Access to quality healthcare coverage is generally a factor every American weighs when making a career decision. However, when workers have consistent healthcare through Medicaid, they are less likely to leave jobs for health insurance elsewhere. In turn, small businesses can save money on recruiting and training new staff and focus on growth instead of turnover-related challenges.

For self-employed individuals or those starting a business, Medicaid provides crucial health coverage during the startup phase when income is uncertain. Perhaps more importantly, it also empowers them to pursue their dream of entrepreneurship instead of staying in a job just for the health insurance.

When people don’t have to spend all of their income on healthcare, they have more money to spend at local businesses. These Medicaid dollars also support healthcare providers, including rural clinics and pharmacies, that serve as small businesses themselves. In addition, Medicaid also indirectly benefits businesses by creating jobs in areas that include retail, construction, and landscaping. It is estimated that the proposed Medicaid cuts could lead to nearly 450,000 job losses in 2026 with roughly half coming in healthcare and the rest in other business sectors.

The strength of the economy in many ways boils down to the health of its workforce and entrepreneurs. Medicaid supports workforce stability, entrepreneurship, economic mobility, and small business growth. In a future column, I will explore the impact of these proposed cuts on Main Streets and their communities.