PNHP

A Preventable Crisis

The unnecessary cuts to Medicare, Medicaid, and the ACA threatening 602 hospitals and the communities they serve

National Nurses United, July 2026

The U.S. hospital industry currently faces a coordinated fiscal contraction driven by three distinct federal revenue cuts:

  1. A mandatory two percent Medicare sequestration triggered by federal debt levels.
  2. A projected 10 to 18 percent reduction in Medicaid funding under H.R. 1.
  3. The expiration of enhanced Affordable Care Act (ACA) marketplace subsidies.

This study applies the combination of these three federal revenue cuts to a cohort of 602 financially vulnerable hospitals that are already operating from an aggregate $10.16 billion deficit. It assesses the financial impact of the coordinated fiscal contraction and its distribution by geography and patient population.

Altogether, this study estimates an additional 50 to 75 percent in aggregate deficit across the 602 financially vulnerable hospitals because of this coordinated fiscal contraction.

Enacted on July 4, 2025, as part of H.R. 1, the cuts to Medicaid and ACA subsidies are the primary driver of this fiscal shock that threatens to deteriorate vulnerable hospitalsā€™ finances. According to the Congressional Budget Office, H.R. 1ā€™s tax provisions deliver the largest benefits to the wealthiest households in America. To do so, it puts the nationā€™s most fragile health care providers, who serve some of the nationā€™s most vulnerable communities, at risk of cuts and closures.

The cost of these federal policy changes is not measured in industrial profits. Instead, the cost is measured in delayed emergency care, forgone preventive services, increased financial burden on families and employers, and diminished local economies, including job losses in areas where hospitals are often the largest employers. Ultimately, it is communities, not the hospital industry, who pay the price for and bear the brunt of these fiscal cuts, whether through the complete closure of a facility, conversion to outpatient or free-standing emergency care, the elimination of specialized services like oncology and maternity care, the reduction of charity care, or increased prices for remaining patients.

This study offers immediate and longterm policy solutions to offset the expected consequences of communities losing access to life-saving care.

full study: https://nationalnursesunited.org…