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Rural Hospital Revenue Could Drop by $87 Billion over 10 Years Because of the Reconciliation Bill and Expiring Enhanced Tax Credits [1]

['Fredric Blavin', 'Michael Simpson', 'Laura Skopec']

Date: 2025-06-30

Several provisions in the proposed reconciliation bill are designed to reduce Medicaid spending, and hospitals are likely to face significant revenue losses because of reductions in health insurance coverage.

Previous Urban estimates show that hospitals could lose $424 billion in total revenue between 2025 and 2034, losing $321 billion from the reconciliation bill and $103 billion from the expiration of enhanced premium tax credits (PTCs) in the health insurance Marketplaces. The Congressional Budget Office estimated that 11.8 million Americans will lose health insurance under the reconciliation bill, and 4.2 million will lose coverage from the expiration of the enhanced PTCs. Losses in health insurance coverage will lead to higher uncompensated care costs and lower reimbursement rates for providers because of limits on provider taxes and state-directed payments.

Our prior estimates project that increases in uncompensated care will reduce hospital revenue by $85 billion between 2025 and 2034, with $63 billion of that reduction attributable to the Medicaid changes in the reconciliation bill. These revenue projections likely represent lower-bound estimates because they only account for changes associated with the increase in the number of uninsured.

Rural areas are particularly at risk from losses of hospital revenues

Using national estimates on changes in provider revenue under the reconciliation bill, we find that rural areas would lose $87 billion in hospital revenue between 2025 and 2034, including $66 billion in lost revenue because of the reconciliation bill and $22 biliion in lost revenue because of expiriation of the enhanced PTCs (total does not equal sum of parts due to rounding).

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[1] Url: https://www.urban.org/urban-wire/rural-hospital-revenue-could-drop-87-billion-over-10-years-because-reconciliation-bill

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