The House of Representatives passed, and the Senate is now negotiating, a budget reconciliation bill that would impose federal funding cuts on Medicaid and the ACA Marketplaces. These changes include, among other things, restrictions on Marketplace eligibility and enrollment and new work reporting requirements, cost-sharing obligations, and more frequent eligibility redeterminations for the Medicaid expansion population. At the same time, enhanced premium tax credits (PTCs) are due to expire at the end of 2025. The Congressional Budget Office (CBO) projections for these various changes add up to an increase in the number of uninsured of 15.9 million when fully phased in by 2034, 11.7 million of which would be attributable to the budget reconciliation legislation.

In this brief, we combine findings from two previous Health Insurance Policy Simulation Model (HIPSM) analyses and the most recent CBO projections of increased uninsurance associated with the reconciliation bill and the elimination of the enhanced subsidies to estimate the likely impact of 15.9 million individuals losing health insurance coverage on provider revenue and uncompensated care costs over the next 10 years. 

Why This Matters

The 15.9 million increase in the number of uninsured individuals projected by CBO represents an over 50 percent increase in the number of people who are currently uninsured, reversing coverage gains achieved by the ACA. These increases in the number of uninsured would significantly impact health care providers, as it is well-documented that uninsured people use less medical care than they would if they had health insurance. The resulting decline in revenue could have adverse consequences for providers and their communities, particularly for hospitals that are already financially at risk.

The increase in the number of uninsured would further strain providers and potentially increase unmet health care needs. The loss of health insurance coverage could also reduce individuals’ access to care, increase financial strains, and worsen health outcomes.

What We Found

We find that if the reconciliation bill were to be enacted and enhanced PTCs were to expire, the increases in the number of uninsured projected by CBO would lead to the following:

• a decrease in spending on health care services of $1.03 trillion between 2025–34 from all payers, with 40 percent of the decline attributable to hospitals ($408 billion), 11 percent to physician services ($118 billion), 26 percent to other services ($272 billion), and 23 percent to prescription drugs ($234 billion):
  • From the House reconciliation bill’s provisions, there would be a $771 billion decline in spending, with $306 billion among hospitals, $79 billion among physicians, $202 billion among other services, and $184 billion among prescription drugs.
  • From the expiration of the enhanced PTCs, there would be an additional $261 billion decline in spending, with $102 billion among hospitals, $39 billion among physicians, $70 billion among other services, and $50 billion among prescription drugs.
• an increase in uncompensated care sought by the uninsured of $278 billion over 2025–34, with $83 billion for hospital services, $34 billion for physician services, $107 billion for other services, and $54 billion for prescription drugs:
  • The House reconciliation bill’s provisions would cause an increase of $198 billion.
  • The expiration of the enhanced PTCs would cause an increase of $78 billion.

How We Did It

Our approach involved combining CBO’s projections totaling a 15.9 million increase in the number of uninsured individuals associated with these statutory changes with per newly uninsured revenue and uncompensated cost estimates from previous HIPSM analyses. These dollar amounts capture spending by all insurers—public and private, state, and federal—not just spending from the federal government.