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 will lose more than $32 billion in revenue next year if the Republican-led Congress doesn’t extend tax credits for those with individual coverage under the Affordable Care Act, according to a new analysis.
The subsidies, or tax credits, make health insurance premiums more affordable for individuals and were enhanced by the Biden administration and the Democratic-controlled Congress in 2021, allowing more Americans to buy coverage. The enhanced subsidies, which expire at the end of this year, helped enrollment in the ACA’s individual coverage, also known as Obamacare, eclipse a record 24 million Americans and help its popularity hit all-time highs.
But legislation sitting before Congress that would extend the tax credits has yet to pass either the U.S. House of Representatives or the U.S. Senate. The tax credits are the key issue for Democrats and may lead to a shutdown of the federal government if Republicans and Democrats don’t come to an agreement about the future of the enhanced subsidies.
Meanwhile, medical care providers are bracing for a huge loss of revenue, according to researchers at the Urban Institute, which is funded by the Robert Wood Johnson Foundation.
In addition to the $32 billion in lost revenue in 2026, hospitals would also see a $7.7 billion increase in “uncompensated care,” which are services these medical care providers must deliver but aren’t reimbursed for by government and private insurers, the Urban Institute report said.
“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.
“Millions of people will lose coverage, and providers will face the one-two punch of losing revenue and increasing uncompensated care,” Hempstead added. “Healthcare institutions are often the economic engines of entire communities. If the credits expire, the ripple effects will be felt for years to come.”
The Urban Institute report is the latest to show the impact on medical care providers and patients who have benefited from the enhanced premiums.
An analysis earlier this month from KFF says enrollees in “benchmark” plans sold on the ACA’s exchances who currently have the enhanced tax credits get significant reductions on their premiums. Take, for example, enrollees “earning over 400% of poverty ($106,600 for a family of three in 2026),” KFF cited in an example in its analysis. These familes “will not spend more than 8.5% of their incomes on out-of-pocket premiums for benchmark plans.”
“Without the enhanced tax credits, these same enrollees will experience a ‘double whammy’ in cost increases, not only losing all financial assistance available through the premium tax credits but also needing to cover the premium increases Marketplace insurers are planning for next year,” KFF wrote in its analysis.