Rural hospitals in the US may face increased risk of closure due to rising healthcare costs, as the enhanced subsidies for the Affordable Care Act (ACA) are set to expire on January 1. The subsidies, which were introduced in 2021 to make health insurance more affordable during the COVID-19 pandemic, have helped over 24 million Americans enroll in the marketplace. However, with the expiration of these subsidies, many Americans may opt for cheaper insurance with higher deductibles or drop their health insurance altogether.
According to an analysis by the Kaiser Family Foundation (KFF), ACA premiums for over 24 million Americans are predicted to double starting in 2026, and the Urban Institute estimates that 4.8 million Americans could lose coverage. This could have a devastating impact on rural hospitals, which often have thin profit margins and rely on a large patient population with insurance. Without the subsidies, many patients may be unable to afford healthcare services, forcing hospitals to close or reduce their services.
Emma Wager, a senior policy analyst for KFF’s program on the ACA, notes that the loss of the enhanced premium subsidies will not only affect consumers but also rural hospitals. “When you have rural hospitals that have very thin margins already, and they see a large portion of their patient population doesn’t have the ability to pay for services anymore, that could force hospitals to close,” she said. The closure of rural hospitals could have far-reaching consequences, including reduced access to healthcare services, especially for those with chronic health conditions.
Zachary Levinson, project director of the KFF project on hospital costs, adds that the significant cuts to Medicaid and Medicare reimbursements under President Donald Trump’s One Big Beautiful Bill Act could also affect the nation’s hospitals and patient care. “If a hospital closes, it obviously doesn’t just affect the people who are coming in without insurance, but it affects everyone who is receiving care from that hospital,” he said.
The expiration of the enhanced subsidies and the resulting increase in healthcare costs could have a disproportionate impact on those with chronic health conditions, who may be unable to afford the increased premiums. Wager notes that this could lead to reduced access to necessary healthcare services, which could have serious consequences for these individuals. The situation highlights the need for continued negotiations on the subsidies and the importance of finding a solution to mitigate the impact of the expiration on rural hospitals and patients.