Impact of Immigration Policies and Medicaid Cuts on Healthcare Employment Growth in 2025

The healthcare industry continues to stand out as a major driver of job growth in the U.S. during 2025, contributing nearly half of the nation's employment increases. Employers added about 487,000 jobs from January through August, with the healthcare sector expanding by approximately 232,000 positions—despite representing only roughly 11% of overall employment. Experts highlight that this growth is essential for the economy, with healthcare leading in job creation.

However, recent federal policies threaten to slow this momentum. The Trump administration's immigration crackdown has raised concerns among economists like Stanford's Neale Mahoney, as many healthcare roles rely heavily on foreign-born workers — about 18% of healthcare employees are born abroad, including a significant number of doctors, nurses, and home health aides. The administration's efforts to deport non-citizens and reduce legal visas may restrict the number of available healthcare professionals, potentially impeding sector growth.

Simultaneously, new legislation has introduced substantial cuts to federal Medicaid spending, with projections indicating a loss of about 1.2 million jobs nationwide. The Commonwealth Fund warns that millions could lose health insurance coverage, leading to increased stress on hospitals, nursing homes, and community health centers, which may face service reductions or closures due to financial constraints.

Regions like California could experience significant employment declines, with estimates suggesting up to 217,000 fewer jobs, predominantly in healthcare. These reductions could also impact job growth in other sectors indirectly. While some data shows signs of potential slowdown, overall healthcare employment remains resilient, especially among roles like nurse practitioners, physician assistants, and home health aides.

Despite challenges, healthcare employment remains attractive due to high earning potential and job stability. Many roles require extensive education but offer lucrative salaries, with physicians earning over $240,000 annually. The industry has also seen a notable increase in job opportunities for women, who make up nearly 80% of healthcare workers. As the population ages—with the number of Americans over 65 increasing dramatically—the healthcare sector's growth is expected to continue, driven further by the need to care for an older population.

While federal policy shifts could pose obstacles, the long-term outlook anticipates sustained demand for healthcare workers, especially in primary care, home health, and support roles. However, policy changes and immigration enforcement efforts may influence the pace and distribution of healthcare employment growth in the coming years.

(Source: https://medicalxpress.com/news/2025-10-health-employment-growth-clouded-immigration.html)