Nearly 3,000 U.S. general acute care hospitals could see an 11.7% to 13.3% cut in their operating margins in 2027 related to upcoming Medicaid work requirements, according to a Commonwealth Fund analysis published Sept. 18.
Those percentages equate to $10.9 billion to $12.4 billion in projected revenue losses for hospitals.
In July, President Donald Trump signed the One Big Beautiful Bill Act. Under the law, states will need to establish Medicaid work requirements for certain individuals as soon as 2027. To be eligible for Medicaid, select individuals ages 19-64 will need to work at least 80 hours, complete community service, participate in a work program, or enroll in an educational program for a set number of hours each month.
Exceptions include caregivers, veterans with disabilities, Native Americans and individuals with special medical needs.
The Commonwealth Fund estimates that 5.1 million to 5.8 million people will become uninsured, and between 400,000 and 500,000 people will enroll in employer-sponsored health coverage or buy private health insurance.
These future work requirements are estimated to reduce hospital revenues and increase uncompensated care costs, which “could force many hospitals to reduce staff and payroll or eliminate important clinical services used by all patients,” according to the report.
In 2024, 40 states and the District of Columbia expanded Medicaid eligibility to non-elderly adults to cover more low-income individuals.
The Commonwealth Fund analyzed projected baseline revenues and expenses for 2,958 general acute care hospitals in the expansion states and the District of Columbia. From the baseline, the organization estimated a low range and high range percent change to operating margins and patient care margins.
While operating margin reductions between 11.7% and 13.3% are predicted, patient care margins could fall between 14.7% and 16.7% in 2027, according to the report. Safety-net hospitals face a sharper decrease in operating margins, with a projected 25.9% to 29.6% reduction.
