By SPEAKIN’ OUT NEWS with reporting from the Robert Wood Johnson Foundation, Urban Institute, and Alabama Reflector
BIRMINGHAM, Ala. — Alabama’s hospitals, clinics, and doctors’ offices are bracing for a potential financial shock that could ripple through nearly every corner of the state’s health-care system.
A new report from the Robert Wood Johnson Foundation (RWJF) and the Urban Institute warns that if Congress fails to renew enhanced Affordable Care Act (ACA) premium tax credits by the end of 2025, Alabama could lose almost $1 billion in hospital and provider revenue — and see one of the largest spikes in uncompensated care in the country.
The enhanced premium tax credits — known as ePTCs — were first enacted under the American Rescue Plan Act of 2021 and later extended through the Inflation Reduction Act. The subsidies make Marketplace coverage more affordable for millions of Americans. If they expire, the report says, millions could lose coverage overnight.
Billions Lost, Thousands Uninsured
Nationally, hospitals and health providers would lose $32.1 billion in revenue in 2026, according to the RWJF study. Alabama alone would see a $939 million drop in total health-care spending, including a 3.5 percent loss in hospital revenue.
The end of the ACA subsidies would also trigger a massive rise in uncompensated care — the unpaid costs hospitals absorb when patients cannot afford to pay. Alabama’s providers would face an 18.3 percent increase in uncompensated care overall, and hospitals would see an 18.8 percent surge.
“The negative effects of allowing these tax credits to expire couldn’t be more stark,” said Katherine Hempstead, RWJF senior policy adviser. “Millions of people will lose coverage, and providers will face the one-two punch of losing revenue and increasing uncompensated care.”
Rural and Southern Communities at Greatest Risk
Alabama is among ten states that still haven’t expanded Medicaid, making it particularly vulnerable. The report found that nine of the fifteen states most affected by these losses are in the South — regions already struggling with high rates of medical debt, rural hospital closures, and uninsured residents.
“Declines in healthcare spending will be most pronounced in states that have not expanded Medicaid,” the study notes, “with the sharpest consequences in rural and Southern communities.”
In many of these areas, hospitals are the largest employers and economic anchors. Losing hundreds of millions in revenue could force some facilities to cut services, lay off staff, or even shut down — further widening care gaps for low-income and minority residents.
What It Means for Alabama Families
The Urban Institute’s Health Insurance Policy Simulation Model projects that, without the ACA subsidies:
• 7.3 million fewer Americans will receive subsidized coverage.
• 4.8 million more non-elderly adults will become uninsured in 2026.
• Marketplace premiums will rise sharply — especially in states like Alabama, where fewer insurers compete.
That means thousands of Alabama families could see their monthly health-insurance premiums jump by hundreds of dollars — or drop coverage altogether.
“If these subsidies expire,” said Fred Blavin, principal research associate at the Urban Institute, “it will be important for policymakers to consider the potential adverse effects on access, affordability, and provider revenues.”
A Familiar Warning for Alabama’s Health-Care System
This report arrives amid broader signs of fragility in Alabama’s health-care landscape. Many hospitals remain financially strained after years of pandemic-related costs and workforce shortages. The Alabama Hospital Association has repeatedly warned that a single large policy shift could push some rural hospitals past the breaking point.
Public-health advocates say the loss of ACA subsidies could amount to that tipping point — hitting uninsured Black, Latino, and rural residents hardest.
“Health coverage is the difference between life and death in many Alabama communities,” said one Birmingham health-policy advocate. “If Washington lets these subsidies expire, it won’t just hurt hospitals — it’ll hurt families, towns, and entire counties that depend on them.”