Expiration of enhanced ACA subsidies: What it means for providers—and how to respond

The expiration of enhanced subsidies for Affordable Care Act (ACA) health insurance premiums at the end of 2025 is likely to leave millions of Americans under- or uninsured in 2026—and presents a major inflection point for providers.

Originally implemented through a 2021 COVID-19 relief package, the enhanced subsidies were intended to help uninsured, low-income Americans get healthcare coverage while providing additional support for middle-earning enrollees struggling to make payments amid the pandemic’s challenging economic climate.

After becoming the subject of a Congressional showdown that led to a record-setting government shutdown in the fall of 2025, the subsidies were allowed to expire, throwing millions of enrollees into the lurch.

As healthier, lower-acuity patients lose coverage and face new barriers to care, provider organizations are likely to see shifts in volume, payer mix, and financial risk. Successfully navigating those shifts will take operational agility, effective demand forecasting, and a strategy backed by the latest healthcare data.

What happens now that enhanced ACA subsidies have expired

The scope of the impact on the patient population is difficult to understate: Research from the Urban Institute projects that more than 7 million people will be cut from subsidized Marketplace coverage this year, and nearly 5 million will become uninsured following the enhanced ACA subsidies expiration. That represents a 21% increase in the uninsured population.

So far, data from CMS shows that ACA sign-ups for 2026 have dropped by over 1 million compared with last year, marking the first decline since 2020.

Across ACA payers, insurance premiums rose an estimated 26% on average due to the elimination of these subsidies, according to the Kaiser Family Foundation. Their research found that patients enrolled under previously subsidized plans saw even higher premium increases, with monthly payments rising by an estimated 114%.

Congress seems to be interested in resurrecting the enhanced subsidies in some form, as the House of Representatives passed a bipartisan three-year extension earlier this year. The Senate, however, has so far failed to reach a deal on the matter. One of the deal’s lead negotiators, Sen. Bernie Mereno, has said that discussions toward a compromise are “effectively over.”

In the meantime, some patients affected by these changes are likely to change their healthcare decision-making to accommodate the less favorable fiscal situation.

This could mean taking fewer trips to the doctor’s office for preventive screenings or routine care, delaying or canceling elective procedures, or becoming uncompliant with prescriptions and care plans. It could also result in patients failing to pay—and thus dropping coverage—once premium payments come due.

For patients with chronic conditions, coverage loss could lead to life-altering—and potentially life-threatening—interruptions in care.

How coverage loss changes volume and payer mix

With fewer patients able to afford care due to the enhanced ACA subsidies expiration, provider organizations will inevitably face changes in patient volumes and payer mixes that impact reimbursement and revenue streams.

Cutting subsidized ACA Marketplace coverage for 7 million people represents a 42% reduction in subsidized coverage overall. While some patients may switch to lower-cost plans or less comprehensive coverage within the Marketplace, others may seek employer-sponsored insurance or Medicaid coverage—especially in states that expanded eligibility.

But millions of patients are likely to remain uninsured without financial assistance. Some healthier patients may opt to drop coverage due to lower perceived health concerns, shifting the proportion of Marketplace enrollees toward those who are sicker, higher-risk, and higher-cost—and pushing providers’ payer mixes toward uninsured/self-pay.

Self-pay patients are less likely than insured patients to fully pay their bills, driving up hospitals’ uncompensated care and bad debt. A report from Cedar found that a 10% shift toward self-pay billings represented nearly $3 million in lost revenue for a $1 billion health system—that’s roughly a month’s worth of lost collections.

All told, U.S. providers could see a loss of $32.1 billion by the end of 2026, along with an additional $7.7 billion in uncompensated care demand, according to an Urban Institute study published by the Robert Wood Johnson Foundation.

Broken down by category, the study anticipates reduced spending on hospital services by around $14.2 billion, office-based services by $5.1 billion, prescription drugs by $5.8 billion, and other healthcare services by $6.9 billion by year’s end.

The hike in demand for uncompensated care will further contribute to providers’—and the government’s—financial pressures, with estimates suggesting providers themselves would be forced to foot the bill for just over half of that care. Another 30% would be financed by the federal government, with 19% covered by state and local entities.

Which service lines and markets are most exposed

Hospitals are expected to take the largest financial hit from the enhanced ACA subsidy expiration, with emergency departments and acute care services under particular strain.

While uninsured patients are more likely than their insured peers to turn down elective or preventive care services, they’re also more likely to be hospitalized for avoidable health problems—and, as mentioned, less likely to fully pay their bills.

Rural and safety-net hospitals will feel the impact of subsidy cuts even more acutely, as these facilities both serve higher proportions of ACA Marketplace enrollees who benefit from subsidies and operate on thinner margins than larger, metropolitan systems, hindering their ability to absorb uncompensated care.

Financial researchers at Fitch Ratings say provider markets in 12 states face an especially high risk of fiscal vulnerability, due primarily to a combination of severe coverage loss, rural hospital concentration, and a lack of state safety nets.

Of those 12, Georgia, Mississippi, Tennessee, Alabama, South Carolina, Kansas, and Wyoming are particularly vulnerable, as they don’t offer expanded Medicaid eligibility. Medicaid expansion states Louisiana, West Virginia, Montana, South Dakota, and North Dakota owe their heightened risk to high reliance on rural health facilities without state-sponsored safety nets.

Using data and demand forecasting to respond

As ACA subsidy expiration brings the insurance market into uncharted territory, provider organizations will need to develop strategies that bolster their bottom lines and ensure resources are directed where they have the biggest impact.

Demand forecasting, powered by healthcare claims data, can help providers identify subsidy-dependent patients, prepare for impending shifts in utilization and payer mix, guide service line growth, and proactively route high-risk patients toward coverage and financial assistance.

By analyzing diagnosis and procedure claims data for specialty, geography, and acuity, providers can better understand their exposure based on the specific makeup of patients in their market. Select patients can then be targeted for specialized engagement, informing them of more cost-effective care options, financial assistance programs, or alternative payment models.

Estimating the proportion of subsidized patients within a specific market allows providers to model the financial impact of lost business or uncompensated care, then build strategies to compensate by driving utilization toward services that are more likely to reliably reimburse. If the enhanced subsidies remain defunct beyond 2026, this data may also help providers direct resources toward better-performing, more resilient service lines.

Get the data to succeed in 2026 and beyond

The expiration of enhanced ACA subsidies isn’t the only factor causing uncertainty in the provider market in 2026. Changing staffing models, hiring slowdowns, increased reliance on technological automation, and a murky policy landscape are all raising questions without easy answers.

Definitive Healthcare’s portfolio of data and analytics products gives providers the tools necessary to find clarity amid the confusion and make more confident, impactful business decisions. Whether you’re preparing to navigate financial headwinds, looking for growth opportunities, or trying to better understand your patient base, Definitive Healthcare is a reliable partner in your journey through uncertainty.

Sign up for a demo today to see how we can support your organization.