ACA tax credit sunset could cost healthcare $32B: Analysis

Hospitals, physicians and other healthcare providers could lose more than $32.1 billion in revenue in 2026 should Congress allow ACA tax credits to expire at the end of 2025, according to a new Urban Institute analysis published by the Robert Wood Johnson Foundation.

The analysis found that 7.3 million people could lose subsidized ACA coverage and 4.8 million could become uninsured, pushing a $7.7 billion spike in uncompensated care in 2026. The increase could hit all provider types, including $2.2 billion for hospitals, $1 billion for physician offices, $1.5 billion for prescription drugs and $3.1 billion for other services.

In terms of raw spending cuts, hospitals would be hit hardest, with $14.2 billion less spent on hospital services, $5.8 billion less on prescription drugs, $5.1 billion on physician services and $6.9 billion less on other services.

“Reductions in health spending and increases in the demand for uncompensated care will vary by state, with the effects being felt most acutely in states that have not expanded Medicaid,” the analysis said. “Health spending for the nonelderly will drop by as much as 4.8% in Florida, Georgia and Texas. Demand for uncompensated care will grow by more than 27% in Mississippi, South Carolina and Tennessee.”

The financial strain could cut care access and undermine healthcare facilities that serve as many community economic anchors, the analysis concluded.

The analysis also comes after Eduardo Conrado, president of St. Louis-based Ascension said in a Sept. 5 blog post that more than 24 million Americans could see their health insurance premiums increase by 93%, on average, unless Congress acts to extend the ACA federal tax credits 

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