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Medicaid Cuts Threaten 1.2 Million Restaurant Workers' Healthcare

Strategic Insights

— 2 min read

As federal budget debates continue, a recent report from One Fair Wage warns that proposed Medicaid cuts could leave over 1.2 million vulnerable restaurant and tipped workers without healthcare, forcing them to choose between their health and their livelihoods. The report, "Serving While Sick: The Effect of Trump Medicaid and Benefits Cuts on Restaurant Workers & Public Health," highlights the severe consequences of these cuts, which would strip healthcare from nearly half of the 2.75 million restaurant and tipped workers currently relying on Medicaid. The analysis breaks down the potential loss of Medicaid coverage, with nearly 400,000 workers losing benefits from initial cuts and an additional 850,000 workers losing benefits due to proposed work requirements.

Key Takeaways:

  • The proposed Medicaid cuts could strip healthcare from over 1.2 million restaurant and tipped workers by 2034, representing 45% of the estimated 2.75 million workers relying on the program.
  • Nearly 400,000 workers could lose Medicaid from initial cuts before work requirements take effect, while an additional 850,000 workers could lose benefits due to proposed work requirements.
  • The "No Tax on Tips" proposal would do little to offset the impact of Medicaid losses, as nearly two-thirds of tipped restaurant workers do not earn enough to pay federal income taxes and would see no benefit from the tax exemption.
  • Restaurant and tipped workers are uniquely vulnerable to such cuts, experiencing poverty at more than double the rate of other workers (16.6% vs. 6.6%) and relying on SNAP at nearly double the rate of the general workforce (17% vs. 9%).
  • Nationally, 24.42% of restaurant workers are enrolled in Medicaid, compared to 12.65% of all workers.

Statistics:

  • 1.22 million restaurant and tipped workers could lose Medicaid by 2034 (45% of 2.75 million workers reliant on Medicaid).
  • 400,000 workers could lose Medicaid from initial cuts before work requirements take effect.
  • 850,000 workers could lose benefits due to proposed work requirements (80 hours per month).
  • 66% of tipped restaurant workers do not earn enough or live in households that pay federal income taxes, meaning they would see no benefit from the tax exemption on tips.
  • 50,000 fewer workers would benefit from the tax exemption compared to the 1.22 million workers projected to lose Medicaid coverage.
  • Restaurant and tipped workers experience poverty at 16.6% (vs. 6.6% for other workers).
  • Restaurant workers rely on SNAP at 17% (vs. 9% for the general workforce).
  • 24.42% of restaurant workers are enrolled in Medicaid (vs. 12.65% of all workers).

Sources:

  • "Serving While Sick: The Effect of Trump Medicaid and Benefits Cuts on Restaurant Workers & Public Health" (One Fair Wage, May 2025)
  • (https://www.onefairwage.org/research-reports/serving-while-sick)

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