Reconciliation Bill and End of Enhanced Subsidies

The Issue

In addition to lost revenue, the analysis shows the spending bill would also increase uncompensated care costs by $278 billion. 

Researchers who prepared the analysis find: 

• Between 2025 and 2034, providers would lose $1 trillion.
  • Hospitals alone would face a $306 revenue hit. 
• The analysis shows the spending bill would also increase uncompensated care costs—services hospitals and other providers are required to provide uninsured people without any reimbursement—by $278 billion, with hospitals facing the largest increase ($102 billion).  
• Researchers project additional provider revenue losses if Congress also allows tax credits that reduce millions of people’s healthcare premiums to expire at the end of 2025.
  • Under this scenario, researchers find provider revenues would decrease by more than $1 trillion over the next decade, as nearly 16 million people would lose Medicaid and the uninsured rate would rise by more than 50%.
  • Hospitals would absorb the largest portion of this revenue loss ($400 billion); office-based physicians would lose $118 billion; other healthcare providers, including dentists and home healthcare providers, would lose $272 billion; and $234 billion less would be spent on prescription drugs.

Conclusion

Researchers conclude the magnitude of proposed federal funding cuts to Medicaid will impact both patients in need and the hospitals and clinics that serve them. 

About the Author/Grantee

The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. Visit the Urban Institute’s Health Policy Center for more information specific to its staff and its recent research.