The federal layoffs aren’t just eliminating jobs—they’re stripping workers of their healthcare, leaving thousands in financial and medical limbo. Across the country, government employees are being forced into early retirement before they qualify for Medicare, blindsided by the realization that their retiree healthcare benefits don’t automatically kick in. Without a plan, many now face a devastating choice: pay out-of-pocket for private insurance, scramble for a new job with benefits, or go uninsured altogether.
“The biggest financial risk most retirees face isn’t running out of money—it’s unexpected medical costs,” says Michael A. Scarpati, CEO of RetireUS. “Many federal employees don’t realize that retiring before age 65 means losing automatic healthcare coverage, leaving them vulnerable to massive out-of-pocket expenses. With federal layoffs forcing early retirements, more employees are being caught off guard, scrambling to figure out how to stay insured. The worst mistake? Retiring without a clear plan for healthcare, because one medical emergency can wipe out decades of savings.”
As the Trump administration’s Department of Government Efficiency (DOGE), led by Elon Musk, pushes for sweeping workforce reductions, the fallout is spreading far beyond Washington, D.C. In rural communities across the Mountain West, where federal employment has long been a stabilizing force, entire families and local economies are being upended. Workers who once managed national parks, public lands, and government programs are not only losing their jobs but also their healthcare—sometimes right before critical medical procedures.
A Political Gamble with Economic Consequences
The layoffs have drawn mixed reactions from Republican lawmakers, particularly in Western states where federal land management jobs are crucial to local economies. Representative McKay Erickson, a Wyoming Republican and vocal Trump supporter, acknowledges that his district, which includes parts of Bridger-Teton National Forest and Grand Teton National Park, has been hit hard.
“These people have a face to me,” Erickson said. “They have a face and a place in either Star Valley or Jackson that I know quite well.”
Despite his belief that government spending should be cut, Erickson warns that indiscriminate layoffs could have severe unintended consequences, particularly for tourism-based economies that rely on public land management.
“This way is so indiscriminate, and it doesn’t really drill down on the real issue as to where those cuts need to be,” he said. “I’m afraid that all we’re going to lose is services.”
Similar concerns are being raised in Montana and Idaho, where over half of all land is federally owned, and where national parks like Yellowstone and Glacier generate billions in economic impact. Many of the government workers who maintain these lands are among those losing their jobs—and their insurance.
The Fallout: Small Towns Left Reeling
Nowhere is the impact of these layoffs more apparent than in Salmon, Idaho, a town of just over 3,000 residents surrounded by national forests and Bureau of Land Management (BLM) lands.
Dustin Aherin, president of the Middle Fork Outfitters Association, which represents 27 local businesses, says that nearly all of the Forest Service employees managing the Salmon River region have been laid off.
“The team in the field that manages the Middle Fork and Main Salmon river, all but two were terminated,” Aherin said. “And the two that were left have been reassigned. We have no on-the-ground management as of right now.”
For small businesses like Aherin’s, this is a potential death blow. Without federal workers to oversee permits, maintain trails, and manage conservation efforts, the tourism and recreation industry that fuels rural economies could collapse.
Aherin has taken his concerns to Capitol Hill, hoping that Idaho’s congressional delegation can intervene. But so far, Republican lawmakers have largely remained silent.
The Human Cost: “We’re Losing the Next Generation of Public Land Stewards”
For many laid-off workers, the financial and emotional toll is overwhelming.
Hannah, a former employee of the Sawtooth National Forest in Idaho, lost her job just weeks before a major surgery. She now faces an uncertain future—no paycheck, no healthcare, and the likely need to relocate.
“In a small town like this, where you only have a couple of good months in a summer season, one hard year and another hard-ish year could be really bad for some local businesses,” Hannah said.
Others, like Andrea Shiverdecker, an archaeologist in Montana’s Custer-Gallatin National Forest, fear for the long-term damage these cuts could cause to the preservation of America’s public lands. She lost her job on Valentine’s Day, just 25 days before her promotion paperwork was finalized.
“How am I getting laid off for performance issues when you were processing my promotion?” she asked. “It’s heartbreaking as a dedicated public servant, as a disabled veteran, as somebody who loves the fact that they’ve served.”
Shiverdecker, like many others, is also struggling with healthcare uncertainty. The layoffs have disproportionately affected early- and mid-career professionals, who are too young for Medicare but often lack access to employer-sponsored plans.
“We’re losing the next generation of public land stewards,” she said. “And our public lands are under threat.”
What Now?
For laid-off federal employees, the options are limited and expensive.
- COBRA coverage is available but can cost thousands of dollars per month.
- Marketplace insurance plans often come with high deductibles and limited provider networks.
- Spousal coverage is an option for some, but not all.
- Some may be forced to take early Social Security benefits, reducing their lifetime earnings.
“Federal employees have a unique advantage when it comes to healthcare—they can keep their Federal Employee Health Benefits (FEHB) in retirement,” explains Scarpati. “But to qualify, they must be enrolled for at least five years before retirement. If that box is checked, FEHB can act as a bridge to Medicare, allowing retirees to maintain affordable, high-quality coverage.”
For those who don’t qualify, careful financial planning is essential. Scarpati and other financial experts are urging federal workers to act now—before severance payments run out and insurance gaps become unmanageable.
The Bigger Picture
As layoffs continue to ripple through federal agencies, the long-term impact is still unknown. But what’s clear is that the loss of these jobs isn’t just a political talking point—it’s a crisis for communities and families across the country.
For now, thousands of former government workers are left with an urgent, unanswered question:
What happens when your country decides it doesn’t need you anymore?