Enhanced Premium Tax Credits were made bigger in 2021 to help lower the cost of health insurance for people buying through the Affordable Care Act (ACA) marketplaces. These subsidies helped many Americans afford insurance by lowering their monthly premiums based on how much money they make.
More than 24 million people signed up for marketplace plans in 2025. Over 90% of them got some federal tax credit. Since 2021, about 10 million more people were able to get coverage because of these credits. They helped people like the working poor, small business owners, part-time workers, and those without insurance from a job pay less for healthcare.
The American Hospital Association (AHA) and other health experts say that if these tax credits end, about 4.2 million people could lose coverage by 2034. That is almost one-third of today’s marketplace enrollees. Many people will have less access to healthcare.
The Congressional Budget Office says that without these credits, insurance premiums could go up by about $700 each year for those affected. Many low- and middle-income families will not be able to afford their coverage. As a result, more people will not have insurance.
When more patients are uninsured, hospitals will face more costs they cannot get paid for. These people still need emergency care and other treatments. The AHA warns this will put a lot of pressure on hospital budgets, especially in rural and underserved areas where Medicaid has not expanded. States like Texas and Florida, which had many marketplace enrollees because of these credits, are at higher risk for coverage and funding changes.
Hospitals get much of their money from insured patients and government programs like Medicaid and Medicare. Medicaid makes up about 20% of hospital income nationwide. Some rural hospitals get as much as 50% of their income from Medicaid. If premium tax credits end, more patients will be uninsured or pay on their own. This will cause more bad debt and charity care.
KNG Health Consulting expects hospital spending to drop by $28 billion over ten years if the premium tax credits end as planned. This happens because fewer patients will have commercial insurance or subsidized plans. Hospitals will have more unpaid bills, making it hard to keep important community services going.
Also, the One Big Beautiful Bill Act (OBBBA), with major Medicaid cuts and work requirements starting January 2027, will make financial problems worse. These changes could put over 25% of hospitals at risk of closing in some states, especially those in rural areas.
Hospitals and medical practices will need to update their financial plans. They will have to rethink payer mixes and manage more self-paying patients and bad debts.
More uninsured people will affect how patients get care. The AHA says emergency rooms may see more patients, have longer wait times, and become crowded. Emergency rooms must treat everyone, no matter if they have insurance. This means hospitals will have more unpaid care costs.
People losing insurance might delay going to the doctor because they worry about costs. This can lead to worse health and more serious problems when they finally get emergency care.
Rural and low-income communities will have a harder time because they depend more on marketplace plans and Medicaid. States without Medicaid expansion will lose more coverage, making health access worse in those areas.
These changes will come with stricter rules. People will need to prove their marketplace eligibility each year. Automatic reenrollment will end and open enrollment periods will be shorter. The OBBBA requires patients to confirm their income and eligibility every year. This will make managing coverage more complicated and increase gaps in insurance.
Doctor groups like the American Medical Association have said that paperwork like prior authorization delays care. The new enrollment and verification rules will add more work for payers, doctors, and patients. Hospitals and clinics will find managing money and patients more difficult.
Besides money problems, hospitals and clinics will face staffing challenges. The Medicaid work requirements need recipients to work or do community activities for 80 hours a month. This may cause many people to lose Medicaid coverage.
Staff shortages could get worse as smaller clinics close or merge. Smaller community clinics may have trouble working with fewer insured patients and more unpaid care.
Hospitals need to think about how they staff their workers because of changes in who pays. Planning early for hiring, keeping workers, and training is important.
With these problems coming, using tools like AI-powered front-office automation can help hospitals work better. Some companies, like Simbo AI, make phone automation and answering services for healthcare. This helps reduce work for reception teams and makes communicating with patients easier.
Automation can help check eligibility, set up appointments, and handle prior authorizations. It lowers mistakes and makes patient contacts faster. Simbo AI’s tools can cut wait times on calls so patients get answers quickly. This is important as verifying coverage and reenrolling manually become harder.
AI workflows improve managing money by making things more accurate and lowering denied claims caused by errors. This lets administrative teams spend more time on important financial planning instead of routine tasks.
Automation also helps meet new rules by keeping records and giving real-time updates on eligibility. This can reduce unpaid care by making patient intake and insurance checking more effective.
Medical practice leaders and hospital managers, especially in areas that rely on marketplace plans and Medicaid, must get ready. They need to understand the timing and impact of the Marketplace Premium Tax Credit ending, new rules, and Medicaid changes.
Updating financial plans to handle more uninsured and self-paying patients is key to keeping money coming in. At the same time, investing in AI automation tools like those from Simbo AI can lower paperwork, speed up work, and improve patient communication. These are all important to run operations smoothly during difficult times.
By watching law changes and using technology, hospitals and clinics can better handle the complex financial and rule changes. This helps them keep giving good care to their communities.
Healthcare providers in Washington DC face regulatory challenges such as prior authorization burdens, the need for transparency in AI algorithms, and efforts to rein in commercial health insurers’ practices that delay care and impose administrative burdens.
The Marketplace Premium Tax Credits are crucial as their expiration could leave approximately 3.8 million enrollees uninsured, reducing demand for healthcare services and increasing the financial burden on hospitals.
This act aims to set standards for prior authorizations, reduce the response time for requests, and requires reporting on approvals and denials, thereby streamlining the process for hospitals and physicians.
Hospitals are seeking safeguards against funding cuts to Medicaid, arguing for the preservation of essential programs like Medicaid Disproportionate Share Hospital payments, which are vital for funding rural and safety-net hospitals.
Recent Medicare pay cuts have aggravated financial pressures on practices, leading to concerns about practice closures and increasing consolidation among healthcare providers, particularly affecting community-based medical practices.
The 340B Program allows safety-net hospitals to purchase discounted outpatient drugs, crucial for maintaining patient services, especially in underserved areas, making it an important revenue source for many hospitals.
Key priorities include making Medicare telehealth flexibilities permanent, extending hospital-at-home programs, and reforming remote monitoring billing practices to enhance access to healthcare.
The proposed registration framework for telehealth prescribers is seen as overly restrictive, complicating the ability to prescribe controlled substances remotely, thus limiting patient access to necessary medications.
Physician groups, such as the AMA, advocate for significant reductions in prior authorization requirements through enhanced health plan transparency, uniform standards, and greater automation in the process.
Professional groups are advocating for policies to increase physician supply through more graduate medical education slots and reauthorization of measures that address clinician burnout and workplace violence.
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