Negotiations on House Republicans’ One Big Beautiful Bill Act are rapidly evolving. Accordingly, the findings of this article may be out of date based on the latest legislative text or proposals under active consideration. A more recent analysis of the bill’s impacts on uncompensated care costs increases can be found here.
This article contains a correction.
On May 22, House Republicans passed a sweeping reconciliation bill that would enact historic cuts to the Medicaid program and erect new barriers for Affordable Care Act (ACA) marketplace enrollees. The Congressional Budget Office (CBO) estimates that this bill, alongside congressional Republicans’ refusal to extend enhanced ACA premium tax credits, would cause nearly 14 million Americans to lose health insurance. Notably, the House-approved bill includes last-minute changes that would both deepen and accelerate coverage losses, including by implementing Medicaid work reporting requirements starting in 2026 and more frequent eligibility determinations two years earlier than initial drafts proposed. This surge in uninsurance would not only destabilize people’s lives but also place immense pressure on health care providers throughout the entire country, as they would be left to absorb staggering financial losses from unreimbursed care services.
By 2034, health care providers could face an estimated $31 billion in uncompensated care costs.
A new analysis from the Center for American Progress projects that if 13.7 million people lose their insurance because of House Republicans’ cuts—which should be considered a minimum and conservative estimate of coverage losses given the last-minute changes to the House bill passed on May 22—uncompensated care costs will surge by $31 billion annually by 2034,* straining vulnerable providers that anchor care in rural and underserved communities. The bill’s supposed “savings” are, in reality, just shifting costs onto health care providers, states, and taxpayers, threatening access to care for millions of families.
Read the more recent analysis
As coverage rates fall, uncompensated care costs rise
Evidence primarily drawn from the ACA’s coverage expansions makes clear that there is a positive correlation between uninsurance and uncompensated care—defined in this article as health care expenses that are neither covered by health insurance nor paid for by a patient out-of-pocket. A 2021 study by KFF found that as the number of uninsured people—ages 0 to 64, in any month of the year—declined from 70.7 million pre-ACA to 53.3 million post-ACA, the share of individuals with any uncompensated costs fell by more than one-third, from 7.3 percent to 4.8 percent. Over the same period, total annual uncompensated care costs fell from $63 billion to $42 billion. An earlier 2014 KFF study also showed that individuals who are uninsured incur far higher levels of uncompensated care expenses: In 2013, average per capita spending on uncompensated care was $1,702 for those uninsured all year, $677 for those uninsured part of the year, and $232 for those fully insured.
Because of the high cost of the care they provide, hospitals absorb the largest share of uncompensated care costs. For example, in 2013, hospitals provided 60 percent of the nation’s $75 billion in total uncompensated care, while community-based providers and office-based physicians delivered 26 percent and 14 percent, respectively.
![]()
Earlier research on the impacts of the ACA’s Medicaid expansion further confirms the relationship between insurance coverage, uncompensated care, and hospital financial performance. One 2016 study found that during the initial years of expansion, hospitals in Medicaid expansion states—which experienced the steepest declines in uninsurance rates—saw significant declines in uncompensated care as well. As a share of operating costs, uncompensated care dropped by 24.4 percent in these states, decreasing from 4.1 percentage points to 3.1 percentage points. In contrast, hospitals in nonexpansion states saw only a modest decline of about 0.2 percentage points. Another study from 2016 found that, overall, Medicaid expansion was associated with a $2.8 million decrease in average annual uncompensated care costs per hospital, significantly improving hospital finances.
Taken together, these studies make clear that as more people become insured, uncompensated care costs decline. The inverse is also true: When uninsurance rates rise—as would undoubtedly happen if Republicans’ reconciliation bill became law—providers face a growing burden of unpaid care.
House Republicans’ “big, beautiful bill” would drive up uncompensated care costs nationwide
A combined 13.7 million people are expected to lose insurance under House Republicans’ proposals, triggering a surge in uncompensated care costs across the nation’s health care system: As a result, CAP projects that health care providers could face an estimated $31 billion in uncompensated care costs. (see Table 1) For example, in Ohio, 400,000 more people would be uninsured by 2034, which would cause uncompensated care costs to rise by an estimated $905 million.
The financial blows would be most severe in states with large populations, including Florida ($4.1 billion rise in uncompensated care costs), followed by Texas ($3.6 billion), California ($3.4 billion), New York ($1.8 billion), and Georgia ($1.4 billion). These impacts would be felt throughout the country, affecting both urban and rural health care providers and the patients they serve.
Unpaid care burden puts rural and safety-net hospitals at risk
While hospital profit margins have reached their highest levels in three decades due to higher commercial insurance payments, hospitals that serve more low-income patients and fewer patients with commercial coverage continue to struggle financially. This is particularly the case for hospitals in rural areas and “safety net” hospitals, which serve a disproportionate share of underserved populations.
In rural areas, an existing hospital closure crisis has already reduced access to care for communities across the country, chiefly in states that did not expand Medicaid under the ACA. A previous CAP analysis indicated that House Republicans’ proposed Medicaid cuts would threaten rural hospitals everywhere—in particular, the nearly 200 hospitals already at immediate risk of closure in Medicaid expansion states. Indeed, these proposals would grow uncompensated care burdens to levels that would threaten the financial survival of providers serving the nation’s most vulnerable Americans.
Read more
Conclusion
By stripping millions of Americans of their health insurance, House Republicans’ planned health insurance cuts would place an enormous financial burden on the health care system. CAP estimates that the 13.7 million increase in uninsured would lead to an additional $31 billion in uncompensated care costs in 2034. Moreover, future coverage losses could be even larger than what the CBO estimated earlier, considering last-minute changes to the House bill passed on May 22 that would both deepen and accelerate Medicaid cuts. This bill is a dangerous step backward for our health care system, threatening the stability of crucial providers.
The authors would like to thank Mimla Wardak and Amina Khalique for their fact-checking. This work was conducted while Andrés Argüello was a consultant with the Center for American Progress.
* Correction, June 10: This article has been updated to use a more precise medical price inflation index. Rather than using the average cumulative increase in the medical consumer price index from December 2017 to January 2025 (5.3 percent), the authors applied the average annual increase in the producer price index for health care services over that same time period (2.6 percent).
Methodology
To estimate the increase in uncompensated care, this analysis built on the 2021 KFF study, which found that post-ACA uncompensated care costs averaged $1,455 per full-year uninsured individual, applying a medical price inflation factor to estimate the impact by 2034. For the medical price inflation factor, the authors averaged the annual increase in the producer price index for health care services between 2017 and 2025, which was 2.6 percent. They then applied this inflation rate to the $1,455 baseline from 2017, estimating that uncompensated care costs would rise to $2,263 per full-year uninsured individual by 2034. This analysis assumes that the CBO and KFF estimates of coverage losses due to the reconciliation bill (8.6 million), as well as due to House Republicans allowing the enhanced ACA marketplace tax credits to expire (5.1 million), refer to full-year uninsured individuals. Finally, the authors multiplied the $2,263 estimate by the projected number of uninsured individuals in each state according to KFF data.