Tennessee hospitals are facing the possibility of a significant rise in uncompensated care costs—projected to increase by 29%—if Congress approves a boost in health insurance market subsidies this month.
Currently, more than 500,000 low- and middle-income residents in Tennessee depend on enhanced tax credits, which have dramatically lowered premium costs through the Affordable Care Act marketplace. Without these credits, many individuals may find health insurance premiums increasingly unaffordable, shifting the financial burden of uncovered care to hospitals. By law, these institutions must provide certain medical services regardless of insurance coverage.
An analysis from the Urban Institute and the Robert Wood Johnson Foundation suggests that if the tax credits expire, the demand for uncompensated care in Tennessee could rise by 29.2%, equating to approximately $378 million by 2026. It’s particularly concerning for rural communities, which could endure the steepest financial impacts due to their higher rates of uninsured residents. Currently, nine rural hospitals in the state are on the brink of closure.
Tennessee is among 15 states experiencing notable increases in uncompensated care, with nine of these, including Tennessee, yet to expand Medicaid options.
The enhanced subsidies were initially rolled out in 2021 during the COVID-19 pandemic. Their continuation has become a crucial point of contention in the ongoing budget negotiations within Congress.
Recently, the Republican-led U.S. House of Representatives passed a short-term spending bill that failed to include measures to maintain the enhanced tax credits for the Affordable Care Act marketplace. In response, Senate Democrats declined to provide sufficient votes to defeat the 60-vote filibuster needed for any changes.
As a counterproposal, Democrats suggested a four-week funding measure aimed at making the tax credit permanent. If bipartisan consensus is not reached to avert a government shutdown by September 30th, these crucial subsidies will come to an end.
