Brief New Spending from Filling the Medicaid Coverage Gap Outweighs Cuts in Disproportionate Share Payments
Michael Simpson, John Holahan, Matthew Buettgens, Jessica Banthin
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This paper provides estimates of the increase in federal subsidies under two provisions of the Build Back Better Act (BBBA) that would flow to people below the federal poverty limit in the 12 states that have not expanded Medicaid (people in the “Medicaid gap”). These subsidies are compared to the cuts in federal DSH payments also called for in the bill. We estimate that in a year that Medicaid gap subsidies are provided, hospitals in the 12 nonexpansion states would see more than $6.8 billion in new spending as a result of the coverage expansions, about 15 times larger than the expected DSH cuts of $444 million. Overall new federal health subsidies going to nonexpansion states would be more than $19 billion.

Research Areas Health and health care
Tags Health insurance Federal health care reform Health equity Medicaid and the Children’s Health Insurance Program  Hospitals and physicians Health care spending and costs
Policy Centers Health Policy Center