Will this bill bankrupt hospitals and providers?

Hospitals survive today by cross-subsidizing. They charge commercial plans far above Medicare to cover public underpayment, unpaid care, and the sheer friction of billing.

Public underpayment is real. The American Hospital Association reports hospitals absorbed about 130 billion dollars in Medicare and Medicaid underpayments in 2023.

They also report Medicare paid about 83 cents for every dollar hospitals spent caring for Medicare patients in 2023.

Uncompensated care is also real, and it is not small. A federal advisory report using Medicare cost reports put charity care plus bad debt at about 42 billion dollars in FY2019. It fluctuates, but the scale is tens of billions. Now add the hidden tax. Billing and insurer friction. A major JAMA study estimated billing and insurance related costs around 14.5 percent of primary care visit revenue, with substantial variation by setting.

Hospitals also report large and rising administrative expense from denials and payment fights. AHA cites Premier research that hospitals spent about 26 billion dollars in 2023 managing insurance claims, up about 23 percent from the prior year, and also cites billions spent appealing denials.

SAFECARE STABILIZES HOSPITALS BY REPLACING THE "CROSS-SUBSIDY CIRCUS" WITH PREDICTABLE RULES

SAFECARE sets national minimum payment floors tied to Medicare and adds geographic adjustments plus rural and safety net stabilization tools, including optional global budgets and an annual access review with corrective action. The point is not to punish hospitals. The point is to stop underpaying the public payer side while preventing sudden access collapse.

A single claims platform and one set of rules means fewer denial loops, fewer prior authorization battles, fewer payer-specific edits, fewer resubmissions. AHA reports that claim denial activity has been rising in the commercial world, including a reported 20.2 percent increase in commercial denials in 2023, and increased time to process and pay claims.

SAFECARE is built to remove that architecture.

The strongest critique is also true. For large medical centers with very high commercial rates, the ceiling drops.

What are commercial rates today. They are often far above Medicare.

• RAND found that in 2022, private plans paid hospitals on average about 255 percent of Medicare for inpatient facility services and about 289 percent for outpatient facility services.
• Milliman's 2025 benchmarking estimates overall commercial reimbursement around 196 percent of Medicare, with inpatient around 209 percent and outpatient around 263 percent.

So yes, replacing a 200 percent to 300 percent commercial payment with a 115 percent national floor can be a revenue drop for hospitals that currently live off extreme commercial markups.

This is the part many people miss. A growing share of hospital bad debt is not the uninsured. It is insured people who cannot afford high deductibles and coinsurance. One widely cited Crowe finding reported "self-pay after insurance" was nearly 58 percent of hospital bad debt in 2021.

SAFECARE bans deductibles and limits cost sharing to modest copays with a hard annual cap. That eliminates a big slice of the bad debt pipeline that comes from insured patients.

Instead of letting a few hospital systems charge 250 percent to 300 percent of Medicare in the commercial market to cover everything else, SAFECARE uses payment floors, geographic adjustments, and targeted rural and safety net tools. That is not "wishful thinking." It is explicit policy that can be measured and corrected.

Under the current system, the people funding cross-subsidy are employers and workers through premiums and deductibles, with no transparency and no bargaining power. Under SAFECARE, the tradeoff is in the open, and access is protected by the access review and corrective adjustments.

SAFECARE raises the floor for underpaid public payer care, crushes deductible-driven bad debt, and cuts the denial-and-appeal tax. It also compresses extreme commercial markups. The bill handles the transition risk by pairing the rate floor with rural and safety net stability mechanisms and mandatory access monitoring, so "rate discipline" does not become "care collapse."