Senator John Barrasso, a Republican from Wyoming, left, Senate Majority Leader John Thune, a Republican from South Dakota, center, and Senator Steve Daines, a Republican from Montana, during a news conference at the US Capitol in Washington, DC, US, on Friday, Sept. 19, 2025. Congress moved closer to an Oct. 1 government shutdown this week as Senate Democrats and Republicans each blocked the other party’s rival plans to provide temporary funding. Photographer: Daniel Heuer/Bloomberg
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Hospitals, physicians, and other medical care providers stand to lose over $32 billion in revenue next year if the Republican-led Congress fails to extend tax credits for individuals with coverage under the Affordable Care Act, according to a new analysis.
The subsidies, or tax credits, play a crucial role in making health insurance premiums more affordable for individuals. They were enhanced by the Biden administration and the Democratic-controlled Congress in 2021, leading to an increase in Americans purchasing coverage. The subsidies, set to expire at the end of this year, have been instrumental in boosting enrollment in the ACA’s individual coverage, popularly known as Obamacare, to over 24 million Americans.
Despite pending legislation in Congress to extend the tax credits, neither the House of Representatives nor the Senate has passed it. The tax credits have become a central issue for Democrats and could potentially result in a federal government shutdown if an agreement isn’t reached between Republicans and Democrats regarding the future of the enhanced subsidies.
Meanwhile, medical care providers are preparing for a significant revenue loss, as forecasted by researchers at the Urban Institute, which receives funding from the Robert Wood Johnson Foundation.
In addition to the projected $32 billion revenue loss in 2026, hospitals are expected to face a $7.7 billion increase in uncompensated care, highlighting the challenges that lie ahead for these providers.
“The consequences of allowing these tax credits to expire are dire,” stated Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation. “Millions of individuals will lose coverage, and providers will face financial strain and increased uncompensated care burdens. The impact on healthcare institutions and communities will be long-lasting.”
The Urban Institute’s report adds to a growing body of evidence showcasing the implications for medical care providers and patients benefiting from the enhanced premiums.
An analysis by KFF earlier this month revealed that enrollees in benchmark plans offered on the ACA exchanges, currently benefiting from enhanced tax credits, receive significant premium reductions. The absence of these enhanced credits would result in cost increases for enrollees, posing a financial challenge for many.
