From Public Health Watch, 08/01/26
Recent federal policy changes will stress U.S. hospital and health systems, making it harder for them to provide care, a new Urban Institute report predicts. |
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New limits on Medicaid financing, work requirements for Medicaid users, the end of health insurance tax credits and other recent health-related policies put into place by Congress and the Trump administration will have a negative impact across the country, according to the July 29 report. |
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Together, the policies are expected to increase the number of uninsured people, reduce hospital revenue and overburden the healthcare workforce. Financial strain could force some hospitals to reduce services, cut staff or close, especially in already struggling rural and low-income communities. As of 2025, about 40% of hospitals were already operating with negative margins, the report noted. |
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Growing numbers of uninsured and underinsured patients are expected to increase uncompensated care, leaving hospitals with more unpaid bills. An additional 5.3 million people are expected to become uninsured under the new Medicaid work requirements alone, according to estimates from the Congressional Budget Office. |
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New limits on state Medicaid financing could also reduce payments to hospitals, making it harder for them to stay financially stable. Safety net, rural, academic and children's hospitals are expected to face greater financial challenges because of their reliance on Medicaid funding. |
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Changes to immigration policies also are expected to worsen existing workforce shortages by making it harder to recruit and retain healthcare staff. Foreign-born workers accounted for 18% of the U.S. healthcare workforce and 27% of hospital physicians in 2023. New Trump administration restrictions on who can enter and stay in the U.S. are expected to squeeze the workforce supply. |
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