Pennsylvania hospitals expected to lose out under ‘Big Beautiful Bill’
Pennsylvania’s hospitals and health care providers could be among the biggest losers under President Donald Trump’s tax cut and spending bill, which passed the
The bill advances many priorities of the Trump administration, including extending the president’s 2017 tax cuts, ending federal income taxes on tips, and increasing military and border spending.
The bill also will cut an estimated
For
“Significant cuts to coverage will drive up the number of uninsured in the state and therefore add to uncompensated care in our hospitals,” Stallings said.
She added that people losing insurance will delay care, which will result in increased cost of care down the line and potential unintended consequences such as lost work time.
Hospitals also expect to be negatively impacted by caps to be placed on provider assessment taxes and state directed payments, Stallings said. The provider assessment tax is money that hospitals pay to states, which then generate a matching amount obtained from the federal government. Hospitals in turn receive the full amount they paid in taxes back as well as that match amount.
Under the spending bill, the amount hospitals can pay in and the match amount they receive both would be capped, essentially reducing Medicaid reimbursements to hospitals.
“State-directed payments are necessary because they help bridge the gap between hospitals’ actual cost of providing care and the years of inadequate reimbursement from Medicaid. It’s a critical funding stream,” Stallings said. “These significant cuts that were included in the
Stallings said at present, Medicaid reimburses
She said over half of the hospitals in the state are operating with negative margins, and a shock to their fragile state could break them.
The Lehigh Valley’s health systems were quiet on the impact of the bill.
St. Luke’s referred questions to the Hospital and
Rural hospitals and hospitals in underserved areas are expected to be hit hardest by reduced reimbursements, Stallings said. Advocates fear more than 300 hospitals nationwide, including five in
The bill includes a rural hospital stabilization fund; however, opponents argue that the amount provided by the fund would not cover the full amount that rural hospitals are expected to lose due to the new caps put in place.
“That funding comes back to hospitals to really supplement that gap in funding and to ensure that critical services remain in communities like maternal health care services and behavioral health care services. These are long-standing state and federal partnerships. Every year, they are approved by the
Stallings added that all hospitals would be impacted, as well as nursing homes and managed care organizations. She said if hospitals close or are forced to scale back services, there will be job losses and economic fallout.
“Our communities will be less healthy and overall our Commonwealth will be less competitive,” Stallings said.
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