Article Summary –
Rural hospitals are at risk of closure as healthcare costs rise with the expiration of enhanced ACA subsidies on January 1, leaving many Americans unable to afford insurance or opting for plans with high deductibles. The lapse in subsidies, coupled with expected Medicaid and Medicare cuts, could result in significant financial strain on hospitals, notably impacting those in rural areas that already operate on thin margins. This situation could lead to service reductions, staff layoffs, and ultimately reduced access to healthcare for both insured and uninsured individuals, particularly affecting those with chronic health conditions who cannot forgo health insurance.
Rural hospitals might see increased closures as health care costs rise following the expiration of Affordable Care Act (ACA) subsidies on Jan. 1.
In 2021, Congress introduced enhanced ACA tax credits to make health insurance more affordable during the COVID-19 pandemic. These credits expanded eligibility and boosted financial aid, doubling marketplace enrollment from 12 million in 2021 to over 24 million by 2025, according to the Commonwealth Fund.
On Dec. 17, House Republicans passed a health care package without extending the subsidies, though negotiations will continue in 2026.
Experts indicate that without subsidies, many will choose cheaper, high-deductible plans or drop coverage entirely.
An analysis from KFF predicts ACA premiums for over 24 million Americans could double, and the Urban Institute estimates 4.8 million could lose coverage.
Emma Wager, a senior policy analyst at KFF, noted that individuals might face increased costs based on location, age, and family size, even those with some subsidy support.
Wager highlighted the impact on rural hospitals, which operate on thin margins and may struggle if patients lose the ability to pay for services, potentially leading to closures.
According to the USDA Economic Research Service, 146 rural hospitals closed or converted between 2005 and 2023, shifting away from inpatient care.
Wager warned that even if rural hospitals remain open, insured patients might face higher charges to cover costs.
Zachary Levinson, project director at KFF, explained that the combined loss of ACA subsidies and significant Medicaid and Medicare cuts under the One Big Beautiful Bill Act could further strain hospitals.
Levinson noted that hospital closures affect all patients, not just those uninsured, as hospitals might reduce services, staffing, and infrastructure investments.
Wager expressed concern for Americans with chronic conditions who cannot easily forgo insurance, emphasizing the human impact of increased premiums and the potential loss of necessary care.
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