Dive Brief:
- Republicans’ massive tax and policy law will lead to an additional 10 million uninsured people by 2034, according to a final analysis by the Congressional Budget Office.
- The tally is 1.8 million people less than an earlier estimate by the nonpartisan budget scorekeeper published in late June, after the Senate parliamentarian struck down a provision of the legislation that would have penalized states that offered Medicaid coverage to undocumented immigrants.
- Overall, the law decreases federal healthcare spending by $1.1 trillion over the next decade, while increasing the nation’s deficit by $3.4 trillion.
Dive Insight:
The final CBO report comes weeks after President Donald Trump signed the massive tax and policy legislation on July 4.
The law has a significant impact on the healthcare sector, with some of the largest cuts coming from the safety-net insurance program Medicaid.
In one of the largest changes to the coverage, some Medicaid beneficiaries will have to report work, volunteer or education hours to stay enrolled. Work requirements are expected to decrease spending by $326 billion, according to the CBO.
The law also freezes provider taxes — or arrangements nearly all states use to fund their share of Medicaid funding — decreasing spending by $191 billion.
Additionally, new restrictions on state-directed payments, where states make supplemental payments for services covered in Medicaid managed care contracts, will save $149 billion, according to the CBO’s estimate.
The healthcare cuts — and the increased number of uninsured Americans — will likely hurt providers’ bottom lines, especially rural hospitals and those that rely heavily on Medicaid reimbursement, experts say.
Hospital groups frequently slammed the legislation as the bill wound its way through Congress, arguing uninsured patients would likely delay care until they ended up in the emergency room and increase providers’ burden of uncompensated care.
To mitigate the damage, lawmakers added a $50 billion fund to buoy already cash-strapped rural hospitals to the legislation. However, the money would only offset about one-third of the estimated Medicaid cuts in rural communities, according to an analysis by health policy research firm KFF.
