Republicans: Let them eat cake

<



https://l.smartnews.com/p-6bTlpfpK/YEM13y


Republicans' new law will limit payments to hospitals that treat patients with low incomes Stacker 1 day ago By Shalina Chatlani for Stateline President Donald Trump's new tax and spending law will likely force more than half the states to reduce payments to doctors and hospitals that treat Medicaid patients, a change critics warn will be particularly harmful to rural hospitals struggling to stay afloat. Stateline examines how this new law will affect those com-munities. <


Medicaid, the joint state-federal health insurance program for those with a low income, reimburses doctors, hospitals and nursing facilities for treating enrollees. But in many cases, the program doesn't fully cover the cost of care, straining providers that serve a large share of Medicaid patients. To help providers cover losses and continue to serve poorer populations, the federal government allows the 41 states, plus the District of Columbia, that have contracted with Medicaid managed care organizations (MCOs) to run their Medicaid programs to direct them to pay providers more — in some cases, as much as commercial plans. Ultimately, taxpayers cover the costs of these so-called state-directed payments — and those costs are growing. As of August 2024, the higher payments were projected to add $110.2 billion per year to Medicaid spend-ing, nearly 60% more than the previous year's projection. <



That higher spending attracted the attention of conservatives on Capitol Hill. Beginning in 2028, the One Big Beautiful Bill Act will cap the payments, forcing state Medicaid programs to reduce reimbursement rates by 10 percentage points each year until they reach either 100% or 110% of what Medicare pays. States that expanded Medicaid under the Affordable Care Act would be capped at the lower rate.


The new law will reduce Medicaid spending by $149 billion over the next decade, according to the Congressional Budget Office, and reduce Medicaid provider payments in as many as 31 states, according to KFF, a health policy research group. A separate analysis by The Commonwealth Fund, another research group, found that Medicaid payments to hospitals would drop by at least 20% in 19 of the 25 states that had publicly available data.<