Healthcare funding on the Brink: What Hospitals Need to Know About the Looming Congressional Showdown
Washington D.C. - As Congress races against a September 30th deadline to avert a government shutdown, the future of key healthcare policies hangs in the balance. Decisions made in the coming weeks could dramatically reshape hospital and health system strategies for years to come, impacting everything from patient access to financial stability.
House Republicans are currently preparing a short-term continuing resolution to fund the government thru November 20th. However, Democrats are signaling they will not support any deal that fails to address critical healthcare provisions, especially the extension of enhanced affordable Care Act (ACA) premium tax credits, set to expire at the end of 2025.
Beyond the ACA credits, a series of regulatory changes from the Department of Health and Human Services (HHS) and the potential fate of pandemic-era flexibilities are adding further complexity to the landscape.Here’s a breakdown of the key issues hospital and health system leaders must monitor this month:
ACA premium Tax Credits: A Potential Coverage Crisis
The expiration of the enhanced ACA premium tax credits poses an immediate and meaningful threat. These credits have fueled a surge in marketplace enrollment, reaching over 24 million in 2025, with the vast majority of enrollees receiving financial assistance.
Without an extension, insurers are already preparing for a substantial increase in premiums. Proposed rate hikes for 2026 average 18%, with many already approved as open enrollment approaches. The American Hospital Association (AHA) warns that losing these credits will overwhelm emergency departments, worsen provider burnout, and exacerbate health disparities as more individuals delay or forgo care. The AHA estimates this could lead to a $28 billion reduction in hospital spending over the next decade.
While a bipartisan effort is underway to extend the credits – the Bipartisan Premium Tax Credit Extension Act would extend them through January 1, 2027 – its fate remains uncertain. The Centers for Medicare & Medicaid Services (CMS) is proactively preparing for a potential lapse by expanding eligibility for catastrophic health coverage in 2026.
HHS Funding Cuts on the Horizon
The House Appropriations Committee recently advanced a funding bill that proposes a 6% reduction in HHS’s budget for fiscal year 2026, bringing it to $108 billion. This cut will likely impact a wide range of programs and initiatives crucial to hospitals and health systems. Details on specific program cuts are still emerging, but leaders should anticipate potential impacts to areas like public health funding, research grants, and support for safety-net hospitals.
Pandemic Flexibilities: Permanent or Temporary?
Two bipartisan bills are currently under consideration that could determine the future of key pandemic-era flexibilities:
* Medicare Telehealth: Expanded telehealth coverage, which proved vital during the pandemic, is set to expire. Legislation is being debated to make these changes permanent, allowing for continued access to remote care.
* Hospital-at-Home Waiver: This waiver allows hospitals to provide acute care services in patients’ homes. Its future is also uncertain, with lawmakers weighing whether to extend or sunset the program.
What This Means for Hospitals
The coming weeks will be critical. Hospital and health system leaders should:
* Engage with policymakers: Advocate for policies that protect access to care and ensure financial stability.
* Monitor legislative developments: Stay informed about the progress of the continuing resolution, the ACA tax credit extension, and the HHS funding bill.
* Prepare for potential scenarios: Develop contingency plans to address potential changes in coverage, reimbursement, and program funding.
The decisions made in Washington this month will have far-reaching consequences for the healthcare industry. World-Today-News.com will continue to provide updates as this critical situation unfolds.
Sources:
* Politico
* Becker’s Hospital Review – ACA Subsidy Expiration
* Becker’s Payer – ACA Enrollment Data
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