Rural hospitals stand to lose $1.6 billion in revenue in 2026 following the expiration of the ACA’s enhanced premium tax credits, according to an Oct. 13 report from the American Hospital Association.
The report, “America’s Rural Hospitals at a Crossroads,” draws the estimate from a Commonwealth Fund analysis that also projects rural hospitals’ uncompensated care costs will rise more than 10% this year.
Congress first passed the enhanced subsidies in 2021, expanding eligibility for and increasing the size of premium tax credits for ACA marketplace coverage. Rural residents were among the biggest beneficiaries because benchmark marketplace premiums run about 10% higher in rural areas, the report said.
With the credits gone, rural states are projected to see a 30% drop in marketplace enrollment and a 36% increase in their uninsured populations from 2026 to 2035, according to a KNG Consulting analysis prepared for the AHA.
More uninsured patients will add to a payer mix that already leans heavily on public coverage. Medicare and Medicaid cover about 72% of rural hospital discharges, and both pay below cost. In 2024, rural hospitals provided more than $5 billion in uncompensated care and absorbed more than $7 billion in Medicare underpayments, a 26% increase from 2020.
“The challenges confronting rural hospitals are both longstanding and intensifying,” the report said.
The subsidy loss compounds Medicaid cuts under HR 1, which could put more than 300 rural hospitals at risk of closure, conversion or service reductions, the report said.
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