Major changes in health funding will affect hospitals' survival

Axios - Sweeping changes to Medicaid and the ACA are combining with rising health costs to make 2026 a high-stakes year for hospital operators.

While major health systems like HCA are likely to weather the worst, some safety net providers and facilities on tight margins could close or scale back services as uncompensated care costs mount and uncertainty around future policies swirls.

• "We took a big hit in 2025," said Beth Feldpush, senior vice president of policy and advocacy at America's Essential Hospitals. "I don't think that the field can absorb any further hits without us really seeing a crisis."

Last year's GOP tax-and-spending law will decrease federal Medicaid funding by nearly $1 trillion over the next decade, translating into millions more uninsured, lower reimbursements and higher costs for hospitals.

• The Trump administration is also considering big changes to the way Medicare pays for outpatient services that could reduce spending by nearly $11 billion over the next decade, including less for chemotherapy.

Hospitals have the rest of this year to boost their balance sheets, invest in technology including AI, and even consider merger plans before the biggest changes take effect in 2027, Fitch Ratings wrote in its annual outlook for nonprofit facilities. The financial outlook remains stable for the sector overall next year, the report predicts.

Hospitals in some instances have started closing unprofitable services like maternity care and behavioral health care in the face of financial pressures. More than 300 rural hospitals are at immediate risk of closing their operations  Read more