Reconciliation Bill Effects on States’ Healthcare Spending and Uncompensated Care

The Issue

Previous research highlighted the national effects of the spending bill passed by the House of Representatives on healthcare spending and uncompensated care. This brief breaks down impacts by state.

Key Findings: 

• National healthcare spending would decline by $797 billion over the next decade.
  • Thirty-six percent of this decline would occur in California, Florida, Texas, and New York.
  • Declines in healthcare spending would exceed $20 billion in nine additional states (Arizona, Georgia, Illinois, Indiana, North Carolina, Ohio, Oregon, Pennsylvania, and Washington).
  • Hospitals would see the biggest decline in spending ($321 billion). Physicians would see an $81 billion cut.
• The United States would see a $204 billion increase in uncompensated care over the next decade.
  • The largest increases in uncompensated care would be in California ($27.5 billion), Texas ($15.9 billion), New York ($13.1 billion), and Florida ($11.7 billion).
  • Hospitals would face a $63 billion increase in uncompensated care, and physicians would face a $24 billion increase.
• 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 there would be an additional $262 billion decrease in healthcare spending.
  • Demand for uncompensated care would increase by an additional $79 billion.

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 in every state.

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.