'Big Beautiful Bill' adds to state healthcare crisis

As Congress debates whether to extend the temporary federal subsidies that have helped millions of Americans buy health coverage, a crucial underlying reality sometimes is overlooked:

- BY BERNARD J. WOLFSON

Those subsidies are merely a Band-Aid covering the often unaffordable cost of healthcare.California, Massachusetts, Connecticut and five other states set caps on healthcare spending in a bid to rein in the intense financial pressure felt by many families, individuals and employers who every year face increases in premiums, deductibles and other health-related expenses.

Hospitals and other healthcare providers are citing Republicans' One Big Beautiful Bill Act, signed by President Trump in July, as one more reason to challenge those limits.

The law is expected to reduce federal Medicaid spending by more than $900 billion over a decade, which mathematically should help the overall healthcare system meet the caps. But the law also is expected to increase the number of uninsured Americans, mostly Medicaid beneficiaries, by an estimated 10 million people. Healthcare analysts predict hospitals and other providers will raise prices to cover the double whammy of lost Medicaid revenue and the cost of caring for an influx of newly uninsured patients.

Whether regulators in some states will allow providers to justify higher prices and exceed the spending caps is unclear. Only California and Oregon can penalize providers financially if they fail to meet targets.

"Are we going to say, 'That's OK'? Or are we going to say, 'Well, you exceeded the target. We're still going to penalize you for that'?" said Richard Pan, a former state lawmaker and a member of the California Office of Health Care Affordability's board. "That has not yet been decided."