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New Spending from Filling the Medicaid Coverage Gap Outweighs Cuts in Disproportionate Share Payments

This report estimates increases in federal subsidies under two provisions of the Build Back Better Act 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 disproportionate share hospital (DSH) payments also proposed in the bill. Authors estimate that within a year from when Medicaid gap subsidies are provided, hospitals in the 12 nonexpansion states would see more than $6.8 billion in new spending for people in the Medicaid gap, about 15 times larger than the expected DSH cuts of $444 million.



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