Senator John Barrasso, a Republican from Wyoming; Senate Majority Leader John Thune, a Republican from South Dakota; and Senator Steve Daines, a Republican from Montana, addressed a news conference at the US Capitol in Washington, DC, on Friday, September 19, 2025. As Congress moves closer to a potential government shutdown on October 1, tensions rise as both Senate Democrats and Republicans continue to block each other’s plans for temporary funding. Photographer: Daniel Heuer/Bloomberg
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Medical practitioners, including hospitals and physicians, are poised to face significant revenue losses—exceeding $32 billion in the coming year—if Congress, led by Republicans, fails to renew tax credits for individuals covered under the Affordable Care Act (ACA). This troubling forecast comes from a recent analysis.
These tax credits play a crucial role in making health insurance premiums more affordable to individuals and were enhanced during the Biden administration and the Democrat-controlled Congress in 2021. The improved subsidies have allowed millions more Americans to access coverage. As they are set to expire at the end of this year, the enhanced subsidies have already contributed to a record enrollment in the ACA’s individual coverage plan, also known as Obamacare, which has seen over 24 million Americans sign up—a figure that highlights its increasing popularity.
However, the legislation aimed at extending these tax credits currently remains stalled in Congress, with both the U.S. House of Representatives and the U.S. Senate yet to pass it. The future of the tax credits is a key battlefront for Democrats, and their expiration could trigger a government shutdown if Republicans and Democrats fail to negotiate an agreement on this matter.
Amid these political tensions, medical care providers are preparing for the financial impact, as research from the Urban Institute indicates that the expiration of these credits will not only result in a $32 billion revenue loss in 2026 but also lead to an increase of $7.7 billion in “uncompensated care”—healthcare services provided for which hospitals and providers are not reimbursed by government and private insurers.
“The detrimental effects of allowing these tax credits to expire are clear,” remarked Katherine Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation. She further elaborated, “Millions of individuals will lose their insurance coverage, and healthcare providers will face the dual challenge of dwindling revenue alongside rising uncompensated care. Healthcare institutions are often the backbone of entire communities; the adverse effects of these credits expiring could resonate for years.”
The Urban Institute’s report underscores the challenges that medical providers and patients reliant on the enhanced subsidies may encounter if Congress fails to take action.
In a previous analysis, KFF reported that participants in benchmark plans available on ACA exchanges who currently benefit from enhanced tax credits pay significantly lower premiums. For instance, families earning over 400% of the poverty level (approximately $106,600 for a three-person household in 2026) are capped at spending no more than 8.5% of their income on out-of-pocket premiums for benchmark plans.
Absent the enhanced tax credits, these families face a “double whammy” impact: not only will they lose all available financial assistance through tax credits, but they will also have to manage the substantial premium increases anticipated by Marketplace insurers for the upcoming year, as highlighted in KFF’s analysis.
