H.R. 1 Medicaid Cuts Threaten Hospital Finances as Uninsured Rate Climbs Toward 16 Million More Americans
核心洞察
Fitch Ratings (搜索) reports nonprofit hospital operating margins rose to a median 1.5% this year, a third straight year of improvement before H.R. 1 policy changes take effect.
The One Big Beautiful Bill Act (搜索) is projected to cut nearly $800 billion from Medicaid (搜索) over a decade, with enrollment reductions and work requirements beginning in January 2027.
Safety net hospitals face steep losses, with MLK Community Hospital (搜索) estimating an $80-$100 million annual hit and more than 300 rural hospitals at risk of closure.
U.S. hospitals are heading into a period of severe financial strain as the Medicaid (搜索) cuts and coverage restrictions enacted under the One Big Beautiful Bill Act (搜索) begin to take hold, according to a new Fitch Ratings (搜索) analysis and reporting on the law's early effects on health systems and patients.
Fitch's report, released last week, found that nonprofit hospital systems posted a third consecutive year of margin improvement, with overall operating margins rising to a median of 1.5% from 1.1% in the prior year. The firm described the result as an "improvement following the historical sector trough of 0.2% in fiscal 2022."
"Performance was supported by strong volumes, easing labor pressures and proactive operational measures, including the adoption of new AI tools, before emerging policy challenges fully affect results," Fitch said in a statement accompanying its report.
H.R. 1 Becomes the Dominant Near-Term Threat
That improvement is expected to reverse. The One Big Beautiful Bill Act (搜索), also known as H.R. 1, was signed into law by President Trump on July 4, 2025. The legislation imposes new work, eligibility and certification restrictions on Medicaid (搜索) recipients and is projected to cut nearly $800 billion from the program over the next decade, with those cuts beginning in January 2027.
"The One Big Beautiful Bill Act (搜索) represents the dominant near-term threat to the sector's credit profile," Fitch said in its report. "Medicaid (搜索) enrollment reductions, stricter eligibility recertifications, work requirements, and caps on provider taxes and state-directed payments are expected to become meaningfully effective beginning in 2027."
Fitch analysts described the legislation as ushering in a "new era of uncertainty." "The passage of H.R. 1 has introduced a new era of uncertainty, one in which the balance sheet cushion accumulated over the past five years will be tested," wrote Fitch Senior Directors Kevin Holloran and Mark Pascaris. The analysts added that "AI driven efficiencies may need to be accelerated to find margin stabilization," and posed the question of whether "balance sheet strength [is] overly masking operational fragility."
Coverage Losses Already Reshaping Hospital Volumes
Hospitals are already absorbing the effects of separate congressional decisions on coverage. Congress declined to renew enhanced subsidies for Americans purchasing coverage on Affordable Care Act (搜索) exchanges, subsidies originally enhanced by the Biden administration and the Democratic-controlled Congress through the Inflation Reduction Act of 2022.
"We believe that access to healthcare and affordability for Americans begins and ends with health insurance coverage," HCA Healthcare chief executive officer Sam Hazen told analysts and investors during the company's second quarter earnings discussion. "Most people need support to secure it whether that is through an employer, the federal government or some other means." Hazen said that with the enhanced subsidies unavailable this year, "many people became uninsured and still needed emergency care from hospitals."
Insurers are reporting corresponding enrollment losses, with Centene (搜索) having lost more than two million Obamacare enrollees.
Safety Net Hospitals Brace for Losses
The financial pressure is expected to fall hardest on safety net hospitals, which by definition provide care regardless of insurance status or ability to pay. Dr. Elaine Batchlor, CEO of MLK Community Hospital (搜索) in Los Angeles, estimates her hospital will lose between $80 million and $100 million a year because of H.R. 1. She is seeking funding from other sources, including a new 5% sales tax recently passed in Los Angeles County to fund local health services including safety net hospitals.
Batchlor pointed to the precedent of King Drew, a similar safety net hospital serving low-income patients in the same neighborhood that closed in 2007 amid safety and quality problems, leaving low-income neighborhoods in South Los Angeles without a hospital for almost a decade. A study found that other area hospitals subsequently saw higher patient volumes and more uninsured patients, with one hospital's share of uninsured patients more than tripling from about 13% to nearly 45%, leading to severe overcrowding and higher costs for insured patients.
"There will be hospitals that will likely close as a result of the financial distress, and the patients that were served by those hospitals will need to go somewhere else," Batchlor said. "They will go to hospitals in other neighborhoods, and those emergency departments will become more crowded, and those hospitals will become more crowded."
One analysis found that more than 300 rural hospitals are at risk of closing because of H.R. 1. Among the 400 members of America's Essential Hospitals (搜索), an association for safety net hospitals, three-quarters of patients served are uninsured or on Medicare or Medicaid (搜索), and those hospitals are already losing money every year, according to president and CEO Jennifer DeCubellis. "We're going to see longer wait times in emergency departments," she said, "and what we've already started seeing, even before the One Big Beautiful Bill, is the loss of services in local communities."
Ripple Effects Across the Insurance Market
The coverage changes extend beyond Medicaid (搜索). H.R. 1 makes it more difficult for people to remain on Medicaid by introducing work requirements and requiring recipients to re-confirm their income and address every six months rather than annually, and it reduces the amount of state funding hospitals receive through the Medicaid program. The Congressional Budget Office expects 16 million more people to be uninsured by 2034.
A September 2 report by Marsh, the consulting firm formerly known as Mercer, estimates that the cost of health insurance plans to employers will increase by 11% in 2027—the biggest jump in decades—with many employers expected to pass those costs on to workers. "Lower government funding and reimbursements in public health programs are also driving higher charges or care in employer plans," the report found.
Heidi Russell, director of the Center for Health Policy at the Baker Institute at Rice University (搜索), described the mechanism by which uncompensated care is shifted to commercial payers. "One of the reasons our premiums have been increasing for employee-sponsored health care is that hospitals that do charity care get a tax benefit, but they also add the cost of their unfunded care to the prices they charge to employee-sponsored health care," she said.
Service Reductions and Delayed Care
Hospitals are already making difficult operational choices. Select Specialty Hospital—Tucson East recently announced its imminent closure, though a spokesperson did not confirm it was because of H.R. 1. One Las Vegas hospital said in August that because of increased demand for emergency room services, it was closing its maternity and NICU services by the end of September.
Dr. Erik Mikaitis, CEO of Cook County Health (搜索), which runs two hospitals and a dozen community health centers in Chicago while also providing care to the Cook County Jail, said the system has seen its uninsured patient share rise from 19% to 25% just since January. He warned that instead of managing patients' diabetes and high blood pressure, doctors will be seeing more patients with strokes and heart attacks in the emergency department. "It's $2,500 to do a colonoscopy, but it's $130,000 to treat someone for Stage IV colon cancer," Mikaitis said.
David Perlstein, president and CEO of SBH Health System (搜索) in the Bronx, said his system may have to pull back on services including a violence interrupter program for teens and a boxing program. "As we erode our margin, we may have to pull back services at some point," he said. "We're not doing it yet. But if this continues and there is no change, we're going to have to make some very difficult decisions in the near future."
For patients, the consequences include forgoing primary care and preventative services. Rena Healy, 30, who has a heart condition requiring $1,000-a-month medication, lost Medicaid (搜索) coverage after moving from Indiana to Tennessee, which has not expanded Medicaid. She said a marketplace plan would cost $500 a month, more than her income as a video game developer allows, and she is applying for more than 100 jobs a week, including as a cashier or certified nursing assistant, despite her condition limiting physical work. She is relying on public clinics and trying to avoid the emergency room even as the monitor implanted in her sternum could show a heart rate reaching 250 bpm.
One study of Medicaid (搜索) expansion in the South found that when more people gained health insurance, health declines in low-income adults slowed because they were able to seek preventative care.