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Hospitals Brace for Revenue Hit as Millions Lose Insurance
5 Nov
Summary
- Millions lost insurance as ACA subsidies expired, impacting hospital revenue.
- Hospitals face reduced government aid for Medicaid patients.
- Deeper reimbursement cuts loom for hospitals starting in 2028.
Major US hospital chains, including HCA Healthcare, Tenet Healthcare, and Universal Health Services, are preparing for revenue challenges. They cite a rise in uninsured patients, which strains operating margins as emergency care for those without insurance often results in uncompensated costs.
Pandemic-era federal subsidies for Affordable Care Act plans expired on January 1, 2026, causing premium increases and leading over 3 million individuals to drop their coverage. Analysts predict this decline in ACA exchange enrollment will negatively impact hospital profit growth by 2027.
HCA estimates the loss of federal subsidies could decrease its income by up to $1.2 billion in 2026. Additionally, Medicaid supplemental payments, designed to help hospitals cover treatment costs, are set to fall sharply after 2026.
Starting in 2027, new Medicaid work rules may increase uncompensated care. The most significant long-term risk begins in 2028 when supplemental Medicaid payments will be reduced annually by 10 percentage points, potentially putting approximately $60 billion in federal funding at risk.
