WASHINGTON — U.S. hospitals, physicians, and other providers could face more than $32 billion in lost revenue in 2026 if enhanced premium tax credits under the Affordable Care Act (ACA) are allowed to expire, according to a new analysis from the Urban Institute.
The report projects that without the subsidies, first enacted by Congress in 2021 during the pandemic, 7.3 million people would lose subsidized ACA coverage and an additional 4.8 million would become uninsured. That drop in coverage would slash health spending across the system, including:
- $14.2 billion less spent on hospital services
- $5.1 billion less on physician office visits
- $5.8 billion less on prescription drugs
- $6.9 billion less on other health services
At the same time, uncompensated care is expected to rise by $7.7 billion, with the burden spread across providers: about $2.2 billion on hospitals, $1 billion on physician offices, $1.5 billion tied to prescription drugs, and $3.1 billion on other services.
“The negative effects of allowing these tax credits to expire couldn’t be more stark,” said Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, which funded the research. “Healthcare institutions are often the economic engines of entire communities. If the credits expire, the ripple effects will be felt for years to come.”
State-Level Impacts
The strain will be most acute in non-expansion states. The analysis projects health spending for the nonelderly could fall by nearly 5% in Florida, Georgia, and Texas, while uncompensated care demand could grow by more than 27% in Mississippi, South Carolina, and Tennessee.
Political Battle
The looming expiration comes as lawmakers spar over government funding. Democrats in Congress are pushing for an extension of the ACA subsidies as part of a broader budget deal ahead of a September 30 deadline to avoid a shutdown. Republicans remain largely opposed, citing the high price tag and what they allege is fraud on the exchanges.
According to the Congressional Budget Office, making the enhanced subsidies permanent would cost $358 billion over the next decade. Yet, with more than 24 million Americans now enrolled in ACA marketplace plans, and insurers already notifying beneficiaries of steep premium increases for 2026, the debate carries both financial and political weight.
