BUSI 523 Week 4 Affordable Care Essay Example

The Affordable Care Act After the Enhanced Subsidies: Repeal by Increments, Medicaid Work Requirements and What They Mean for a Community Hospital

Introduction

The finance committee of a 180-bed community hospital asked a blunt question at its last meeting: what will federal health policy do to our revenue over the next three years? Since 2014, the Patient Protection and Affordable Care Act has shaped the hospital's payer mix by moving thousands of local residents from uninsured status to Medicaid or subsidized Marketplace plans. The law has survived repeated attempts at outright repeal, but it is now being changed in smaller steps, through expiring subsidies and new Medicaid rules. This essay argues that health care organizations should stop asking whether the Act will be repealed and start planning for its gradual erosion, because the financial effects of piecemeal rollback are already arriving.

What the Act Built

The Act rested on three pillars. First, it created Marketplaces where individuals without employer or public coverage could buy private plans, with premium tax credits that capped premiums as a share of income for people between 100% and 400% of the federal poverty level. Second, it expanded Medicaid to adults with incomes up to 138% of poverty, an option the Supreme Court made voluntary for states in 2012. Third, it reformed insurance markets, barring denials for preexisting conditions, requiring essential health benefits and letting adult children keep family coverage through age 25. Harrington (2016) explains that providers' revenue depends on the mix of payers and the rates each pays, and the Act changed that mix directly: uninsured patients who once produced bad debt and charity care became Medicaid or commercial patients who produced payments, even if Medicaid paid less than cost.

Evidence of the Act's Effects

The coverage gains have produced measurable effects on health and finances. Jiang et al. (2023) systematically reviewed 30 studies of Medicaid expansion and cardiac care and concluded that, on balance, expansion states saw wider coverage of cardiac treatment, fewer cardiac complications and deaths in the community rather than in the hospital and some increases in screening and treatment of cardiac risk factors, though the authors noted that comparisons between states cannot rule out all confounding. The financial benefits reached households as well. Kluender et al. (2021) used credit reports for nearly 40 million people and found that between 2013 and 2020, the flow of new medical debt in collections fell from $330 to $175 per person in states that expanded Medicaid in 2014, while nonexpansion states moved only from $613 to $550. For hospitals, less medical debt among patients means fewer uncollectible accounts. The coverage gains also changed hospital finances directly. Uncompensated care fell in expansion states as Medicaid began paying for patients who had previously been uninsured, and many rural hospitals in those states credited expansion with keeping their doors open. Those gains are exactly what rollback puts at risk, which is why the question of repeal is a finance question for every provider, not only a political one.

Repeal by Increments

Full repeal failed in Congress in 2017, when the Senate fell one vote short, but two recent changes accomplish part of what repeal would have done. Supporters of these changes make serious arguments: the enhanced credits were costly, they extended subsidies to higher-income households and they were enacted as temporary pandemic measures, while work requirements reflect a view that able-bodied adults receiving public benefits should work, train or volunteer. A finance leader does not need to settle those arguments to plan for their effects. The first concerns subsidies. In 2021 and again in 2022, Congress temporarily enhanced the premium tax credits, removing the 400% income cap and lowering what lower-income enrollees paid, which helped Marketplace enrollment reach record levels. Those enhanced credits expired in 2026. Goldstein Novick et al. (2026) simulated the effect on families and found that net premiums for families between 100% and 250% of poverty would rise from about 1.8% of income to 6.2%, or from roughly $1,335 to $4,100 a year in 2023 dollars, while families above 400% of poverty would see premiums rise from 8.4% to 15.2% of income. If the credits were repealed entirely, lower-income families would face premiums near 27% of income. National projections reflect the consequences. Keehan et al. (2025) projected that the share of Americans with health insurance would decline in 2026 and 2027, partly because of the expiring credits, slowing spending growth even as health care's share of the economy rises toward 20.3% by 2033.

The second change is the 2025 budget reconciliation law, signed on July 4, 2025. Rao et al. (2026) describe its Medicaid provisions, which impose work requirements on nondisabled adults, require more frequent and stringent eligibility checks, limit coverage for some immigrants and restrict financing mechanisms states have used to raise federal funds. Varcie et al. (2026) estimated that about 18.5 million Medicaid enrollees will likely be subject to the work requirements beginning in 2027. They found that 78% would have at least one route to exclusion or compliance, which means the largest driver of coverage loss may be paperwork, specifically states' capacity to verify that eligible people qualify.

Implications for the Health Care Industry

For the community hospital, these changes shift its payer mix back toward self-pay. In the framework Harrington (2016) lays out, every patient who moves from Medicaid or a subsidized plan to uninsured status changes from a low but reliable payment to a likely charity care or bad debt write-off. If 8% of the hospital's 22,000 Medicaid and Marketplace patients lose coverage, roughly 1,760 people would become uninsured, and the hospital's uncompensated care, now about 3% of operating expenses, could rise substantially. Rural hospitals and safety-net hospitals, which depend more heavily on Medicaid, face the greatest exposure. Insurers face sicker risk pools as healthier enrollees drop Marketplace coverage, physicians face more unpaid visits and states face administrative costs to run work requirement verification.

The hospital can prepare. It can train financial counselors to help patients keep coverage through redeterminations and document exemptions from work requirements, screen every self-pay patient for Medicaid and financial assistance, model payer mix scenarios in its budget and work with community organizations that help residents report work hours. These steps cost money, but they protect both patients and revenue. A financial counselor who keeps one hundred families enrolled in Medicaid for a year may preserve more revenue than her salary, and she spares those families the debt and delayed care that follow a coverage gap. The hospital should also update its budget assumptions. Harrington (2016) emphasizes that revenue forecasts depend on expected volume by payer, so the finance committee should build at least three scenarios for 2027, ranging from modest to severe coverage loss, and tie hiring and capital decisions to the scenario that unfolds rather than to last year's payer mix.

A Biblical Perspective

Paul instructed the Galatian churches to bear one another's burdens and so fulfill the law of Christ (English Standard Version Bible, 2001/2016, Galatians 6:2). Insurance is, at its root, a way of sharing burdens across a community, and the Act's subsidies and Medicaid expansion extended that sharing to people who could not carry the cost of illness alone. Christians disagree about how much of that sharing government should do, and reasonable arguments about cost and federal spending deserve a hearing. Whatever the law becomes, a health care organization cannot simply hand the burden back to the families least able to carry it.

Conclusion

The Affordable Care Act is not disappearing in a single vote, but its reach is narrowing through expired subsidies and new Medicaid rules. The evidence suggests coverage losses will bring higher premiums for families, more medical debt and more uncompensated care for providers. Health care leaders should plan now: model the financial effects, invest in coverage assistance and treat every patient's insurance status as something worth protecting. Policy may shift again after future elections, since subsidies and Medicaid rules have changed with nearly every Congress since 2010. An organization that builds the capacity to help patients enroll, renew and document eligibility will be ready whichever way the law moves, and it will serve its community well in either case.

References

English Standard Version Bible. (2016). Crossway. (Original work published 2001)

Goldstein Novick, N. P., Formanowski, B., Lorch, S. A., Nelin, T. D., Montoya-Williams, D., Wilpers, A. B., & Salazar, E. G. (2026). Estimating costs to families facing changes to ACA enhanced premium tax credits. Pediatrics, 158(4). https://doi.org/10.1542/peds.2026-076871

Harrington, M. K. (2016). Health care finance and the mechanics of insurance and reimbursement. Jones & Bartlett Learning.

Jiang, G. Y., Urwin, J. W., & Wasfy, J. H. (2023). Medicaid expansion under the Affordable Care Act and association with cardiac care: A systematic review. Circulation: Cardiovascular Quality and Outcomes, 16(6), e009753. https://doi.org/10.1161/CIRCOUTCOMES.122.009753

Keehan, S. P., Madison, A. J., Poisal, J. A., Cuckler, G. A., Smith, S. D., Sisko, A. M., Fiore, J. A., & Rennie, K. E. (2025). National health expenditure projections, 2024-33: Despite insurance coverage declines, health to grow as share of GDP. Health Affairs, 44(7), 776-787. https://doi.org/10.1377/hlthaff.2025.00545

Kluender, R., Mahoney, N., Wong, F., & Yin, W. (2021). Medical debt in the US, 2009-2020. JAMA, 326(3), 250-256. https://doi.org/10.1001/jama.2021.8694

Rao, P., Baker, L., Girosi, F., Li, E., Kerber, R., & Eibner, C. (2026). State-level impacts of key Medicaid provisions in the One Big Beautiful Bill Act. RAND Health Quarterly, 13(4), 4. https://doi.org/10.7249/rhq-13-04-04

Varcie, J., Bhat, S., Knox, T., & Howard, H. (2026). Over 3 in 4 adults potentially subject to Medicaid work requirements may already have a route to exclusion or compliance. Health Affairs Scholar, 4(9), qxag219. https://doi.org/10.1093/haschl/qxag219