With enhanced ACA subsidies set to expire Dec. 31 and a proposed two-year extension still in limbo, health system executives are bracing for a wave of financial, operational and access-related challenges, particularly among vulnerable patient populations.
The delayed proposal, dubbed the “Healthcare Price Cuts Act,” would reinstate subsidies with new eligibility caps and cost-sharing reforms, according to Politico and MS Now. But with no final policy in place and millions of Americans at risk of losing coverage in early 2026, hospital and health system leaders are already planning for the worst.
Uncompensated care and rising ED demand
For many leaders, the potential expiration translates directly into more uninsured patients, more emergency room visits and more uncompensated care.
“Even though it’s uncertain, we’re currently operating under the assumption that the subsidies for the exchanges will go away, and that’s likely to increase uncompensated care,” Kyle Benoit, executive vice president and COO of Dover, Del.-based Bayhealth, said on a recent episode of the Becker’s Healthcare Podcast. “As a not-for-profit, community-based hospital, that will probably mean more activity in our ER. We have to care for these patients when they walk through our doors.”
Bayhealth is investing in fast-track ER areas for lower acuity patients and streamlining inpatient flow to manage rising volume. But Mr. Benoit emphasized that the broader system pressures won’t go away, and waiting for political clarity isn’t a strategy.
“It doesn’t matter which political party is in control; there will always be pressure on healthcare. We need to be prepared. More than ever, we need to find ways to be more efficient, make care more accessible, lower costs and improve outcomes,” Mr. Benoit said. “That’s possible, but we have to stop hoping challenges will go away and instead focus on real opportunities to reduce the cost of care while staying accessible to our patients.”
Financial strain, operational recalibration
At Blythedale Children’s Hospital in Valhalla, N.Y., internal discussions have been taking place for months about how to model out 2026 and beyond.
“We’re paying close attention to the financial implications of changes within Medicaid and other payer landscapes,” Nathaniel Beers, MD, president and CEO of the hospital, told Becker’s. “We’re trying to avoid short-term budget decisions that won’t hold up long term.”
Dr. Beers warned that if subsidies expire, health systems could see a rise in underinsured patients — especially in high-acuity, high-cost settings — with different impacts based on geography and payer mix.
“Different hospitals will be affected differently, depending on geography, patient demographics, and payer mix. But regardless of where you are, I think we can all expect to see more patients making tough decisions about whether they can afford insurance — and what happens when they need care but aren’t adequately covered,” he said.
Rural access, policy workarounds and legislative outreach
For Ballad Health, a 20-hospital system headquartered in Johnson City, Tenn., the challenges are compounded by rural dynamics, low reimbursement and high labor costs.
“We’ve operated in an environment with pretty low reimbursement already. Our area wage index is one of the lowest in the country. So we’ve had to be efficient in how we operate,” COO Eric Deaton told Becker’s. “We are one of the lowest cost per adjusted admission in Tennessee and Virginia, compared with for-profit and nonprofit hospitals. We push as much money down to the front lines as possible and invest in capital.”
Ballad is leaning into technology — particularly telehealth — to cut costs and preserve local access. The health system has avoided thousands of patient transfers through tele-cardiology and tele-neurology programs.
“It’s important for us to keep rural access open. We’ve done that by expanding telemedicine services, so we don’t have to transfer patients or have physicians in every rural area,” Mr. Deaton said. “Tele-cardiology and tele-neurology eliminated 4,000 to 5,000 transfers that would have gone to tertiary centers. It keeps people in their community and reduces costs. Leaning into that technology has been positive for us.”
However, Ballad continues to push lawmakers for support as challenges facing rural providers become increasingly acute and complex.
“To keep access to rural healthcare, especially Medicaid, we have to keep it funded appropriately. If there’s not a reversal in HB1, then maybe other things can help us,” he said. “The area wage index is one of those — where we can be paid at the same Medicare rate as more urban hospitals. We’re still recruiting the same nurses and doctors, so why are we being paid less for the same type of care? We’re looking for alternatives to offset reimbursement reductions in 2028. We have a couple of years to work on that, and our legislators have been supportive of keeping rural hospitals open and supporting our system.”
Planning through uncertainty
Some systems are actively working with local and regional regulators to shape response strategies in real time.
“We are advocating nationally as best we can,” Steve Leffler, MD, interim CEO of UVM Health Network and president and COO of UVM Medical Center in Burlington, Vt., told Becker’s. “We’re spending time right now with our local regulators at the Green Mountain Care Board in Vermont and the legislature on both sides of the lake — New York and Vermont — on what we believe the impact will be and how we will help manage that population.”
UVM is exploring new pricing models and alternative sites of care to serve patients who may lose coverage. That includes offering lower-cost testing, imaging, and outpatient services that patients could realistically pay out of pocket.
A national concern with local impacts
While systems vary in size and strategy, all share a common concern: that millions could lose access to coverage, and hospitals — already facing labor shortages, inflation and tight margins — will have to absorb the fallout.
“The most vulnerable populations are going to take the most significant cuts, and the most likely outcome of that will be increases in uninsured patients who will defer care, utilize more emergency departments for things like primary care. The long-term health effects of this are particularly concerning,” Adrienne Moore, senior vice president of finance at Phoenix-based Banner Health, said during an upcoming episode of the Becker’s Healthcare Podcast. “We’re seeing projections of up to 10 million people losing coverage by 2034, and that’s very concerning.”
Providers are anticipating a decline in effective chronic care management, which raises serious concerns about the broader implications for population health — particularly among vulnerable groups, though it’s likely the effects will extend to other communities as well.
Banner is carefully evaluating its investments and preparing for shifts in care patterns, particularly in emergency departments and chronic care management.
“We are both waiting to see what the final changes look like, and we’re being thoughtful stewards, making sure we’re putting our investments in the right places to prepare to take care of these patients the best we can as their coverage changes,” Ms. Moore said.
