Article Summary –
Rural hospitals risk closures as rising healthcare costs coincide with the expiration of enhanced ACA subsidies on January 1, leading to higher premiums and potential loss of insurance for millions. The cessation of these subsidies is expected to cause premium costs to double, affecting over 24 million Americans, with an estimated 4.8 million losing coverage, which may force individuals to choose less costly insurance with high deductibles or no insurance. The broader impact includes potential hospital closures, especially in rural areas, and additional pressures on hospital services due to Medicaid and Medicare reimbursement cuts, which could result in reduced services and increased costs for all patients.
Rural hospitals could face more closures as health care costs are projected to rise with the expiration of enhanced 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 changes expanded subsidy eligibility and increased financial aid for those already qualified. As a result, ACA marketplace enrollment surged from around 12 million in 2021 to over 24 million by 2025, according to the Commonwealth Fund.
On December 17, House Republicans passed a health care package omitting the extension of these subsidies. Politico reports that the GOP plans to negotiate further on subsidies in 2026.
Experts suggest losing subsidies will lead many to choose cheaper insurance with higher deductibles or abandon coverage. An analysis from KFF predicts ACA premiums for over 24 million will double in 2026. The Urban Institute predicts 4.8 million may lose coverage.
Emma Wager, a senior policy analyst at KFF, notes the impact on those relying on rural hospitals. “Rural hospitals, already operating on thin margins, might see a big part of their patients unable to pay, forcing closures,” she stated.
USDA Economic Research Service reports 146 rural hospitals in the U.S. closed or converted to non-acute clinics between 2005 and 2023, ceasing inpatient care.
Wager points out even if rural hospitals remain open, insured patients might face higher costs. Zachary Levinson of KFF highlights that the loss of ACA subsidies, coupled with Medicaid and Medicare reimbursement cuts under the One Big Beautiful Bill Act, could further strain hospitals.
“A hospital closure affects all patients, not just the uninsured,” Levinson said. “Struggling hospitals might cut services, staff, and investments, impacting care quality.”
Wager expressed concern for Americans with chronic conditions who can’t forgo coverage. “Healthy individuals might forgo insurance due to high premiums; however, those anticipating expensive health needs have no choice but to pay, risking lack of necessary care,” she added.
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