Tag Archives: Health

The Election Ends Tonight. Their Campaign Starts Tomorrow.

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https://healthcareuncovered.substack.com/p/the-election-ends-tonight-their-campaign

Health care costs dominated the midterms. The industry that profits from those costs has spent decades learning how to make voters’ demands disappear once the ballots are counted.

After the votes are counted, the candidates and their exhausted staffs will finally get some rest. The people I used to work with in the insurance business won’t. Inside that world, an election was never the end of a fight over health care. It was the start of a new phase, and it was usually the phase that mattered most.

If I were still in my old job, I likely would soon be sitting in a briefing with Bill McInturff and some of his colleagues at Public Opinion Strategies, the Republican polling firm he co-founded, which had insurers’ lobbying and PR group AHIP as a client when I was in the industry. They would walk us through their latest poll results, not just on the candidates but on what people were saying about the issues, especially health care. At that briefing or one soon after, they would tell us how various talking points and phrases were likely to resonate. We used that advice in our speeches, press releases and media statements and in the talking points we wrote for our lobbyists.

McInturff’s firm has been doing this kind of work for a long time. It did the message and ad testing for the Harry and Louise commercials, which were widely credited with helping defeat the Clinton health plan in the 1990s, and it calls its specialty “combat message development.” McInturff also conducts the NBC News poll with Democratic pollster Jeff Horwitt, and their final survey before today’s election gave Democrats a 52% to 45% lead among registered voters. “Democrats are in total control of the 2026 issue agenda,” McInturff told NBC, noting that only voters who see immigration as a top issue are breaking for Republicans right now. I don’t know whether his firm still works for AHIP, but I would be surprised if the industry weren’t getting this kind of briefing from someone this week.

None of my former colleagues have leaked this year’s strategy memos to me, but I know how the industry has responded to elections like this one, and it has plenty of reasons to be nervous right now.

What voters said

Candidates in both parties spent this year talking about affordability because voters left them little choice. Health care ranked second in political ad spending in competitive Senate and House races, according to the Cook Political Report, as STAT noted this morning. In KFF’s final tracking poll before the election, conducted in September, six in 10 voters said they were worried about affording health care. Health care tied with gas as their top money worry, and voters trusted Democrats over Republicans on health care costs by 42% to 22%.

Only 15% of adults said our health care system works well enough to need minor changes or none at all. Support for Medicare for All reached 66%, the highest KFF has recorded and up from 53% in 2020. What the industry will find especially alarming is that more than half (52%) said they would favor Medicare for All even if it eliminated private insurance companies. In 2020, only 37% said that.

I can assure you the industry has never seen numbers this bad before. And those numbers and history tell me what my former colleagues will do next.

We have seen this movie

The best guide to the coming months is what happened after the 2018 midterms, when health care also helped drive the results. At least 48 incoming freshmen had campaigned on Medicare for All or something similar. Insurers and its allies had already seen that coming and formed the Partnership for America’s Health Care Future over the summer.

Internal documents obtained by The Intercept and Documented showed that as soon as the results were in, the Partnership began telling reporters that candidates who embraced Medicare for All had lost too, pointing to races like Kara Eastman’s in Nebraska. It used research from Third Way, a business-friendly Democratic think tank, to argue that the winners hadn’t really won on that issue. (Third Way is already signalling it will try to do the same thing this cycle by trying to point the finger of blame at “the government.”) “’Medicare for All’ didn’t win,” an insurance brokers’ lobbyist whose group backed the Partnership told The Intercept. The group also hired consultants with deep Democratic ties and planned a speakers bureau of former Democratic officials who could argue that expanding Medicare was bad policy and bad politics.

Two years later, the Partnership announced new ads to run during the Democratic National Convention, aimed at the party’s public option pledge. Within 24 hours, The Lever reported, anonymous Democratic aides were telling The Hill that the party would likely start with more modest fixes to the Affordable Care Act if Biden won. No federal public option ever became law.

The pattern goes back much further. I was still at Cigna in 2007 when AHIP hired the PR firm APCO to blunt the impact of Michael Moore’s Sicko and make sure any government-run health plan or option looked politically impossible. And in 2009 and 2010, while the industry was publicly claiming a seat at the reform table and insisting it could be trusted to work in good faith with President Obama and Congress, AHIP quietly sent about $100 million to the U.S. Chamber of Commerce to help fund the fight against the Affordable Care Act. While the industry couldn’t kill the ACA, it was able to call on a friend, Senator Joe Lieberman of Connecticut, who caucused with the Democrats, to get the public option stripped out of the bill. Killing the public option was always Job One for the industry.

What to watch for

Here is what I would expect to see in the weeks and months ahead, regardless of which party comes out on top:

  • A quick verdict on what the election meant: Watch for stories, op-eds and think tank memos (like those from Third Way) declaring that voters want modest, practical fixes and that candidates who promised more ran too far ahead of the public. Some of these will be sincere analysis pieces. Others will trace back to people paid to reach that conclusion, so it’s always worth asking who funded the study.
  • Fear, aimed exactly where the polling says it works: The industry reads polls closer than anyone. KFF found that 76% would oppose Medicare for All if they heard it could mean delays in tests and treatment, 64% if it meant higher taxes and 61% if it threatened the current Medicare program. You will hear about waiting lines, taxes and seniors. You will also hear that the current system offers “choice,” a word my colleagues and I loved because it tested so well. That messaging obscures the reality that your employer or your insurer’s narrow network usually does the choosing, but the messaging works with many people.
  • Messengers you might trust: People tend to discount what an insurance executive says, which is why the executives rarely say it themselves. When Congress was considering a Patients’ Bill of Rights in the late 1990s and early 2000s, I worked behind the scenes with industry peers and our PR firm, Porter Novelli. Our big coup came when we got the National Federation of Independent Business to carry our message. Readers saw small business owners worried about costs. They didn’t see us. Expect to see doctors, small business owners, former officials and friendly Democrats playing that role again.
  • A deal that looks like a win: The industry prefers a voluntary pledge to a new law. Last year, AHIP announced with great fanfare that insurers would voluntarily ease prior authorization, and its message to Washington was that no one needed to pass a law to make them behave. The industry also doesn’t mind legislation that sends more public money to insurers. Some of those proposals may well help people. The question to ask about any of them is whether it changes how insurers make their money or just gives them more of ours. The research firm Capital Alpha is already telling clients to expect “deal-making by threat of regulation.” STAT also reports some bipartisan support for restoring at least part of the enhanced Affordable Care Act premium subsidies, though Republicans would demand reforms in return. Any such deal deserves the same question.
  • Division and misdirection: Progressive Democrats will be set against moderates, and Republican voters will keep hearing that fraud is the real problem. Blame will land on hospitals, physician practices and drug makers, and some of it will be deserved. All of it helps if it keeps anyone from looking closely at what the seven biggest for-profit insurers have become.

The money behind it

All of this is expensive, but the industry has boatloads of the money we pay in premiums and taxes to fund its war chest. AHIP reported $5.32 million in federal lobbying in the first quarter of this year, which was its highest quarterly total on record at the time. It spent $17.23 million in 2025, up from $11.77 million in 2024. When I added up lobbying by the big insurers and four of their trade and advocacy groups last year, I found $476.5 million in just over five years. Those totals don’t include most of the advertising, and all of it ultimately comes out of our premiums and our taxes.

And you’ll see from the latest update to the Health Insurance Influence Tracker, a project of the Center for Health & Democracy that I lead, that the campaign money reaches both parties too. The tracker tallies that ten health insurer PACs gave about $4.2 million directly to candidates on this year’s congressional ballot. But the money wasn’t spread around evenly, about 97% went to incumbents, regardless of party, while challengers and candidates running for open seats shared just about $128,000. In only two of the 470 House and Senate races did both candidates receive money from those PACs. The industry wasn’t betting on who would win, but the folks who already hold power.

The first test

We won’t have to wait for the new Congress to see how this plays out. Government funding runs out on Dec. 11, and more than a dozen health care policies expire at the end of the year, making year-end spending legislation the likely vehicle for health care measures in the short term. Lobbyists do some of their best work on bills like that, which tend to come together quickly and with little public attention.

What you can do starting tomorrow

The industry’s strategy depends on the rest of us moving on, so here are a few questions to put to the winners, whichever party they belong to.

  • Will you take insurer PAC money? You can look up your members of Congress and see what they have received so far.
  • What are your plans to address the amount of money people actually pay? Ask about premiums, deductibles and copays together, because a lower premium can hide a higher deductible.
  • Will you scrutinize how insurers make their money – and do something about it? That includes prior authorization, Medicare Advantage overpayments and the pharmacy benefit managers that insurers own.
  • Will you hold public hearings on insurers’ business practices? Insurers should have to explain them on the record, and voters should get to watch.
  • Who wrote your talking points? When a lawmaker tells you voters don’t really want big changes, ask where that idea came from.

When I was in the industry, we knew that public anger over health care came in waves. We also knew the anger usually receded when Congress turned to other things and the news moved on, and we planned our work around that. For a long time, we were right to count on it. Whether we are right this time depends on what voters do after today.

Get Your Healthcare at … Costco?

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Large companies have been spending the last several years getting into—and sometimes subsequently shrinking—their footprint in the healthcare business. Some of them, such as pharmacy retailers like CVS and Walgreens, could be considered “healthcare adjacent” because of their pharmacy component, which is already considered healthcare. As discussed below, these entities have been entering the healthcare space in a few different ways—although primarily through the expansion of primary care and clinic services. This blog provides a high-level overview of how and where these expansions have taken place, how Costco’s latest venture differs from others, and considers important questions for policymakers that these shifts raise.

Both Walgreens and CVS began providing “direct-to-consumer” retail healthcare clinic services within their stores in 2013 and 2016, respectively. Over time, Walgreens expanded the ability of its clinics to provide not just primary care but services for people with chronic health conditions in 2013. Then, in 2020/2021, they created a partnership with an entity known as VillageMD to staff and run hundreds of their healthcare clinics. The growth of these clinics has reversed in recent years, with many closings happening across the country after the company was acquired by private equity firm Sycamore Partners in 2025. As of August 2026, Walgreens was still operating in the neighborhood of 8,000 clinics nationwide.

In the case of CVS, it began providing primary care clinic services in 2016 through the acquisition of MinuteClinic. According to its website and the National Retail Federation, CVS grew to be the largest provider of “retail” healthcare in the US. Perhaps more significant for CVS was its acquisition in 2018 of Aetna health insurance company. The intent of the merger was to provide more coordinated care to a larger share of the population, building on Aetna’s and CVS’s respective strengths. Additionally, in 2023, CVS acquired Oak Street Health, which focuses on helping older adults stay healthy through routine primary care like vaccinations and screenings.

But the growth of these large entities may slow. Just this week, it was reported that CVS plans to split its insurance and pharmacy businesses. David Joyner, the current chairman and CEO of CVS Health, noted of the reason behind the move that “each company will have greater flexibility to adopt the technologies that best fit its needs, improve efficiency and more effectively adapt to the regulatory and other dynamics.” This kind of decision may therefore draw in part from broader public concerns that the size of such entities may result in further scrutiny on the insurance side of their business.

Other big retail companies, such as Walmart and Amazon, have also launched healthcare services. Walmart was operating health clinics as well, but began discontinuing and closing retail clinic services in 2024 because of financial losses. Currently, however, they still provide pharmacy services as well as preventive and health insurance coverage services. Amazon, on the other hand, dramatically expanded its footprint in 2023 when it partnered with One Medical to offer AI-powered in-person and virtual care options with various health systems across the US.

Another way these companies are entering the healthcare space is through partnerships with or acquisition of existing healthcare companies. The latest company to do so via a strategic partnership is Costco, a large wholesale membership company known for selling groceries and other items such as gasoline, eyeglasses, and pharmacy products, at lower cost. In August 2026, Costco announced a partnership with the SCAN Group, which, according to SCAN’s website, provides new ways to deliver evidence-based patient-centered care to older adults. SCAN, a not-for-profit, has several companies that provide everything from healthcare for the unhoused, in-home care, insurance coverage, and primary care—all focused on older adults. They operate in states such as California, Nevada, Texas, Washington, and New Mexico.

What is different about Costco’s arrangement compared to CVS, Walgreens, Amazon, or Walmart is threefold: Costco’s venture into healthcare is (1) not-for-profit, (2) focused on the aging/senior population, and (3) delivering services in the long-term care space such as care management and insurance products (including a Medicare Advantage plan).

With all these nontraditional entities entering the healthcare space in various forms, there are important questions for policymakers and regulators to consider. These include:

  • What are the goals of these entities that are more recently entering the healthcare space versus traditional healthcare providers?
  • What is the impact of these entities on the healthcare marketplace?
  • What is the impact of these healthcare entities on health outcomes for people, and is this a good or bad development generally?
  • What other role should government play as it relates to these changes?
a large sign spins on top of a Caduceus. the five panels of the sign show the logos of amazon, CVS, Costco, Walmart, and Walgreens.
What are the goals of these entities that are more recently entering the healthcare space versus traditional healthcare providers?

The goals of these companies’ ventures into healthcare are not always explicitly stated. For some, the goal was to expand customized consumer experiences. Presumably, each saw a need/demand by customers for more services. For others, entering healthcare may be part of an overall business growth strategy. Still, for others, it may be about integrating care and moving toward value-based outcomes. In the case of Costco, it is targeting a specific market (the aging population) in a different way (insurance). Given the footprint of these entities in healthcare, policymakers may want to consider what is in the best interest of the public good and whether such organizational ventures are resulting in positive or negative impacts—or perhaps a little of both. This leads one to ask a few more questions…

What is the impact of these entities on the healthcare marketplace?

The entry of these entities is seen as disruptive to the traditional healthcare system. But disruption may be viewed as both a positive and negative development for the industry. Disruption can force innovation and broaden choice. At the same time, it is possible it may shift where and from whom consumers access healthcare. One such example is the company created by Mark Cuban, Cost Plus Drugs, which is meant to disrupt the pharmacy industry and lower costs for consumers. Developing a rubric and measures by which to gauge impacts on things such as quality, cost, and outcomes in health should be a consideration for policymakers. Policymakers may also choose to allow new marketplace entrants to see if there might be a positive impact, such as more choice of providers by consumers or a better consumer experience. Monitoring these impacts may be difficult, but some states have started such efforts by better understanding who is entering the market. They are doing so by requiring the reporting of what are known as “material transactions” (i.e., purchases or acquisitions between businesses of a certain amount). Ultimately, if a venture is not needed, is not sustainable, or is done suboptimally, consumers may “vote with their feet” and choose not to use the service.

What is the impact of these healthcare entities on health outcomes for people? And relatedly, is this a positive development generally?

Many of the objective analyses on the entry of nontraditional companies into healthcare have focused on market impacts and not necessarily overall outcomes for consumers. This is, in part, because population health impact is harder to track. But the individual companies that have entered healthcare have done their own monitoring of outcomes. For example, CVS reports that they saw an average reduction in A1C of 1.9 percent (i.e., lower blood sugar, which reduces harm from Type 2 Diabetes) through their Transform Diabetes Care initiative and a 44 percent reduction in hospital admissions through Oak Street Health, which provides primary and specialty care for older adults. One broader positive impact has been on increasing access—primarily to primary care and pharmacies—although many companies have pulled back on their in-person retail clinics. Policymakers could consider requiring any entities in healthcare, including those considered to be nontraditional, to report all the same quality measures that traditional providers do. These measures are largely overseen nationally by the National Committee on Quality Assurance. States also mirror these quality and outcome reporting requirements with their state-based quality measurement systems, such as New York’s Quality Assurance Reporting Requirements.

What other roles should government play as it relates to the growth of nontraditional healthcare providers?

Traditional healthcare (e.g., hospitals, nursing homes, federally qualified health centers, etc.) is highly regulated. To bill for services, providers must enroll in programs to get a National Provider Identifier (NPI number) and be credentialed. In some cases, companies may do this themselves, while others have chosen to buy or partner with entities that are already enrolled providers.

In the case of Costco’s latest venture with SCAN to serve the 65+ year-old Medicare population, the service being offered is itself different because it is a Medicare insurance product. These products have regulations governing participation, marketing practices, and compliance. Should any of the aforementioned companies decide to serve the Medicaid population, which is primarily lower-income individuals or people with disabilities, the regulatory requirements may vary by state because this program is jointly administered by the federal and state government.

Conclusion

As this blog reflects, a growing number of companies that are not traditional healthcare providers have been entering the healthcare marketplace. As discussed, there are new ways companies are entering this space (from retail healthcare to pharmacy to insurance for aging services), and there are potential pros and cons to this development. To ensure that the entry of these companies into healthcare is a more positive development, policymakers may want to consider more evenly applying regulatory requirements and oversight across the marketplace. They may also want to more closely monitor impacts on access to services, costs, and outcomes for consumers to the same degree as is done for traditional providers. In the meantime, it will be interesting to watch how and to what extent these larger retail companies evolve in the healthcare marketplace.

Midterm Elections Won’t Fix Hospitals’ Financial Challenges in 2027

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https://www.healthleadersmedia.com/ceo/midterm-elections-wont-fix-hospitals-financial-challenges-2027

Democratic healthcare priorities could ease some financial pressures facing providers, but congressional constraints will limit the changes lawmakers can make.

KEY TAKEAWAYS

Hospitals will continue to face financial headwinds from federal healthcare policy changes already enacted.

Medicaid and ACA Marketplace coverage remain central to Democrats’ efforts to address the financial impact on providers.

Congressional oversight and budget negotiations give lawmakers avenues to influence policy implementation even when a full reversal is out of reach.

The midterm elections will give Democrats greater influence over federal healthcare policy, creating an opening to address some of the financial pressures facing hospitals.

Party leaders have signaled interest in restoring funding for programs affected by the One Big Beautiful Bill Act (OBBBA), particularly Medicaid and the Affordable Care Act (ACA) Marketplace. Those priorities could offer some relief to hospitals as they prepare for 2027.

However, Democratic control of Congress does not guarantee a reversal of the healthcare provisions already enacted, leaving hospitals and health systems to contend with the financial consequences of those policies.

“While the election has changed who controls Congress, it doesn’t change the financial challenges hospitals will face in 2027,” Chris Van Gorder, president and CEO of Scripps Health, said in a statement. “Democrats won’t have the votes to simply reverse major federal health care cuts over a presidential veto. But Congress is far from powerless. Lawmakers can use their oversight and budget authority to press for changes in how those cuts are carried out, protect critical health care funding where possible and work across party lines to ease the growing financial pressures on hospitals and impact on patients.”

Democrats could offer a lifeline

Two areas of potential focus are Medicaid and ACA Marketplace coverage. Democrats have indicated they want to address cuts to these programs, which could have direct consequences for hospitals’ finances.

Reversing or mitigating Medicaid reductions could limit the number of people who lose coverage and help hospitals avoid further growth in uncompensated care. For health systems serving large Medicaid populations, changes to eligibility and federal funding can affect both patient coverage and the reimbursement hospitals receive for care.

Restoring enhanced ACA premium tax credits is another potential priority. The expiration of those subsidies could make Marketplace coverage more expensive for many enrollees, potentially leading some to drop their plans. A congressional effort to restore the subsidies could help preserve enrollment and reduce the number of patients who arrive at hospitals without insurance.

The financial effects will depend on the scope of any legislative changes and how quickly they take effect. Even if Democrats pursue these priorities, hospitals should not assume that coverage losses or funding reductions already set in motion will be fully reversed.

Congressional authority has limits

Democratic control of Congress gives the party greater power to mold the legislative agenda and scrutinize the administration’s implementation of federal healthcare policy. Reversing major provisions of OBBBA, however, would face significant obstacles.

Even with majorities in both chambers, Democrats would need enough votes to overcome a presidential veto. The party’s Senate majority falls short of the two-thirds threshold required, making a wholesale reversal of the law unlikely while President Trump remains in office.

Congressional Democrats could still use committee oversight and budget negotiations to influence how federal healthcare policies are carried out. They could press the administration on implementation decisions and pursue targeted legislation where bipartisan support exists.

For hospital leaders, the election changes the policy environment, but the financial outlook for 2027 remains difficult. Medicaid funding reductions and changes to Marketplace coverage will continue to influence hospitals’ financial planning as the new Congress considers its priorities. Any relief will depend on what lawmakers can pass and what the administration allows to take effect.

Risant Health’s Integris Deal Tests its Value-Based Care Strategy

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https://www.healthleadersmedia.com/ceo/risant-healths-integris-deal-tests-its-value-based-care-strategy

The acquisition allows Risant to keep growing while giving Oklahoma’s largest nonprofit health system access to technology and investment resources.

KEY TAKEAWAYS

Integris Health would become the third health system to join Risant Health, following Geisinger and Cone Health.

Risant has committed billions of dollars to capital investments and implementation support at its existing health systems.

Risant reports gains in operating margin at Geisinger and reduced clinician documentation time at Cone Health as it seeks to extend its value-based care model.

Risant Health’s planned acquisition of Integris Health will expand its network of community-based health systems and test its ability to spread value-based care practices across differing organizations.

The two systems have signed a definitive agreement, giving Integris access to technology and other resources through Risant, a nonprofit created by Kaiser Permanente to help health systems transition toward value-based care.

For Integris CEO Timothy Pehrson, the arrangement could accelerate investments that would be difficult to achieve independently.

“These are investments and capabilities we couldn’t make or build on our own, not at this scale and not this fast,” Pehrson said in the announcement.

Oklahoma City-based Integris operates 20 hospitals and has the state’s largest physician network. The acquisition would make it the third health system to join Risant, following Geisinger in Pennsylvania and Cone Health in North Carolina.

Risant’s strategy depends on spreading technology and clinical practices across its member organizations while allowing them to retain their local identities. Kaiser Permanente CEO Greg Adams described the goal as moving “from siloed, episodic care to a value-based care approach with an increased focus on evidence-based care that achieves healthier outcomes for more people.”

The acquisition raises questions about how Risant will translate its strategy into results across distinct health systems. Integris reported $3.3 billion in operating revenue and a $22.3 million operating loss in fiscal 2025, highlighting the importance of investments that can support its long-term performance.

Risant points to early results at its existing health systems as evidence of progress. Geisinger has realized benefits equivalent to nearly a 1% improvement in operating margin since joining Risant, according to the organization. At Cone Health, Risant reports that ambient clinical documentation technology has reduced the time clinicians spend on notes per patient encounter by almost 14%.

Those examples illustrate the potential of shared resources to affect clinical workflows and financial performance. The results at Geisinger and Cone Health, however, do not establish how quickly Integris could achieve similar gains.

Risant’s operating revenue reached $6.7 billion in the first half of 2026, up 9.9% from $6.1 billion in the same period a year earlier. Its financial results do not separately disclose operating income for Risant, making it difficult to assess the overall financial performance of its model.

Risant has made substantial capital commitments to its existing health systems. It has pledged to make at least $2 billion available to Geisinger through 2028 and committed at least $1 billion in capital over five years to Cone Health, along with up to $400 million for integration and implementation of its value-based care platform and up to $300 million for growth over the following decade.

For Integris, the immediate appeal is access to investment capacity and capabilities. The longer-term test will be whether those resources help Integris advance value-based care while strengthening its operations.

The agreement remains subject to regulatory approval.

More ACA Premium Spikes to Come in 2027 Amid Federal Policy Changes

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https://www.commonwealthfund.org/blog/2026/more-aca-premium-spikes-come-2027-amid-federal-policy-changes?utm_campaign=The%20Connection&utm_medium=email&_hsenc=p2ANqtz-8V3pn8EbkpgDcDV0THrnl3kHcJX4UdyLAkvhFzPVo_0k8AHyFzlLB8EIp7zjJSFaHP4LjRLbpbcLNDPqoruNT7EqyrxA&_hsmi=446033437&utm_content=446033437&utm_source=hs_email

For people who get their health insurance plans in the Affordable Care Act (ACA) marketplace, coverage became much less affordable in 2026. Insurers increased premiums by more than 20 percent; the average “benchmark” premium before tax credits jumped from $497 per month in 2025 to $625 in 2026.1 These increases were partly the result of actions federal policymakers took — for instance, slashing the tax credit some people received to reduce their health plan premiums and imposing new restrictions on enrollment. Predictably, as premiums rose and financial assistance shrank, consumers’ payments soared and enrollment dropped sharply.

Consumers will get no relief in 2027. Insurers have proposed a median 15 percent rate increase for 2027, with significant variation across insurers and states. These back-to-back double-digit rate increases are the highest we’ve seen in the marketplace since 2018 and follow five years of relatively flat premiums, with average increases of only 2 percent per year for the benchmark plan. Insurer rate filings for 2026 and 2027 reveal that the federal policy changes to the ACA are contributing to these significant rate increases.

What Are Rate Filings and What Information Do They Contain?

Each year insurers adjust their rates so that the premiums they charge will cover projected future health care costs, administrative expenses, and profit. To project future costs, insurers consider a range of factors, including how many people will enroll, how healthy or sick enrollees will be, how much the prices for health care services are likely to rise, and expected changes in how many medical services people will use. Insurers document how these various factors will impact their proposed rates in the annual rate filings. Under the ACA, these filings are subject to independent review from insurance regulators and portions of the filings must be made public.

https://flo.uri.sh/visualisation/30489845/embed?auto=1

Why Are Marketplace Insurers Raising Rates Again for 2027?

Rising health care costs are a key driver of 2027 rate changes. This is an issue for all private health insurance, and indeed, some analysts expect medical costs to grow faster in 2027 than they have in nearly two decades. The marketplace insurer rate filings point to a range of contributing factors, including higher provider prices, higher prescription drug costs, increased use of various services and medications, effects of health care workforce shortages, and general inflation.

But the marketplace rate increases are also the result of recent federal ACA policy changes. Most notable is Congress’ failure to extend ACA premium tax credit enhancements at the end of 2025. Enhanced subsidies were in place from 2021 to 2025, making coverage far more affordable and leading to record enrollment. Their expiration drove up rates in 2026; new rate filings signal ongoing effects.

Marketplace enrollment is expected to decline precipitously this year — by a range of 17 percent to 26 percent. As marketplace plans become less affordable, younger and healthier individuals are more likely to drop coverage. Remaining enrollees will be sicker on average and more costly. Many marketplace rate filings cite the end of premium tax credit enhancements and declining enrollment as further driving up rates in 2027, compounding 2026 increases.

Marketplace consumers will face additional barriers in 2027 that may also impact rates. New paperwork burdens will make it harder to enroll, and many lawfully residing immigrants will lose access to financial assistance that keeps premiums affordable. These changes will further drive down enrollment, leading to a smaller, sicker, and more costly marketplace risk pool.

How Will This Affect Affordability and Access for Consumers?

ACA premium tax credits provide a crucial buffer against insurers’ rate hikes. Policymakers’ decision to end the enhanced version of the credits caused that buffer to shrink for millions of people with modest incomes. For millions more (i.e., Americans with middle incomes), this cost buffer vanished completely. As a result, people with annual incomes of more than $63,840 for an individual or families of four with incomes of $132,000 or more will bear the full brunt of two years of double-digit rate hikes, with no financial help. For example, a 40-year-old individual with income just over this threshold who paid $445 per month after tax credits were applied in 2025 could owe $719 per month in 2027.2

As premiums become less affordable, marketplace consumers may continue to “buy down” to plans with lower premiums but higher deductibles. This would leave more enrollees underinsured, facing greater barriers to care and increased exposure to medical debt.

In addition, at least seven insurers — Baylor Scott & White Health Plan, CareSource, Cigna, Medica, Mending (formerly Taro Health), PacificSource, and Providence Health Plan — have announced they will no longer offer marketplace coverage in 2027. These insurers point to escalating costs, declining enrollment, and shifting regulations. Their exits will force consumers in 20 states to switch to new plans next year. With fewer coverage options, they may have a harder time finding plans that cover their doctors and prescription medicines. Less competition among insurers is also associated with higher premiums.

Looking Forward

Americans struggling to afford health care are concerned about the high cost of their health insurance premiums. They look to the federal government for solutions, yet recent actions by Congress and the Trump administration have made the problem worse. The ACA marketplaces have proven resilient, but the upheaval created by these recent policies could threaten their long-term stability. For now, with open enrollment around the corner, many marketplace consumers will soon face higher prices and fewer choices.

By Barring Profits on Basic Coverage, Switzerland Keeps Insurers from Denying Care

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https://www.linkedin.com/pulse/barring-profits-basic-coverage-switzerland-keeps-robqc

Roughly two-thirds of the U.S. population has health coverage through private insurance companies. Despite paying about $1,600 a year out of pocket on deductibles, copayments, and coinsurance, Americans have no guarantee their insurer will cover the cost of their care. Because insurance companies in the United States seek to maximize their profits, they have an incentive to deny payment for some services, even for recommended care, and to raise monthly premiums and out-of-pocket costs.

Switzerland has also struggled to make health care affordable for all residents, with one of the highest levels of out-of-pocket spending per person in the world, comparable to the U.S. average. Like the U.S., it relies largely on private health insurance, with residents choosing among competing insurers. But unlike the U.S., Switzerland bars insurers from profiting off basic plans. That difference helps explain why nearly a third of the U.S. population has medical bills or debt they are paying off over time, while only 2 percent of the Swiss population reports the same problem.

Regulating Private Insurers in Switzerland

Switzerland’s current system of mandatory basic health insurance (obligatorische Krankenpflegeversicherung, or OKP) was established in 1996 and requires all residents to purchase health insurance from authorized private insurers. Today, 100 percent of the population is covered through OKP, and everyone has access to the same nationally defined baseline benefits package, regardless of insurer. Because everyone is enrolled, costs are spread out across healthier residents and those who need more costly care.

Premiums are set by insurers but subject to federal approval. All plans include a minimum annual deductible of CHF 300 (USD 340), 10 percent coinsurance capped at CHF 700 (USD 794) annually, and a daily hospital fee; adults can choose plans with deductibles up to CHF 2,500 (USD 2,835) in exchange for lower premiums. The Swiss government also caps the price of services and what insurers pay providers to control costs.

While the federal government sets these baseline standards, it does not sell insurance directly. Residents choose among private insurers based on premiums, deductibles, provider restrictions, and networks, while guaranteed a core set of protections. Those who don’t enroll are assigned a plan by their local government and are responsible for late fees and past-due bills.

The most fundamental feature of the Swiss insurance market is that insurers are prohibited from earning a profit on basic health plans and must use a community-rating premium structure that shares costs between sicker and healthier individuals. Any surplus collected from basic premiums that exceeds paid claims must either be held in reserve to cover future costs or be returned to policyholders. Insurers also cannot deny coverage for any medically necessary care included in the basic package.

Insurance companies can, however, profit from supplementary private insurance, which covers services such as dental care and private or semiprivate hospital rooms. For these plans, insurers can reject applicants and vary premiums based on health status, age, and sex.

Despite federal regulations, affordability remains a major hurdle in the Swiss health system. Out-of-pocket spending is among the highest in the world, and premiums, which do not vary with income, can burden families who do not qualify for subsidies. Still, the system rests on a strong commitment to social solidarity, and some Swiss see these costs as the price of insuring everyone, even the most vulnerable. Because deductibles and coinsurance on basic plans are capped each year and claims for covered care cannot be refused, few residents fall into medical debt.

America’s Underregulated Private Insurance Market

The U.S. private insurance market is not entirely unregulated: the 2010 Affordable Care Act (ACA) prohibits insurers from denying enrollment based on preexisting conditions, age, or sex. The ACA also requires plans to cover essential health benefits and cap out-of-pocket spending, and it provides income-based subsidies for coverage bought through the marketplaces.

Since private insurers are permitted to operate for profit, they still have an incentive to limit what they pay out to maximize their earnings. While people cannot be denied enrollment, insurers can delay payment for doctor-recommended services or deny claims altogether by arguing the care was not medically necessary or by citing other technicalities.

In 2025, one in five U.S. working-age adults with private insurance said they or a family member had been denied treatment their doctor recommended in the past year, and about 40 percent of them said the denial led to delayed care. More than two in five adults whose claim was denied reported it led to medical debt they are still paying off. In one survey, most working-age adults with private coverage who were paying off medical bills or debt blamed insurance companies.

Fact: More than three in four adults in the U.S. who are underinsured — meaning their out-of-pocket costs are unaffordable relative to their income — are covered by private insurers.

While both Switzerland and the United States have an individual mandate requiring residents to enroll in a health plan — which is necessary for maintaining balanced risk pools — enforcement differs greatly. Since 2019, the ACA’s federal tax penalty for going without coverage has been reduced to $0, and only four states and Washington, D.C., impose their own financial penalties.

In both countries, a person’s insurer, out-of-pocket spending, and provider networks vary widely. But while federal regulation in Switzerland ensures all residents have robust minimum coverage standards, without fear of insurers creating obstacles to care in pursuit of their own profit, American patients have far fewer protections against companies that refuse or stall payment for care.

The Democrats Already Have a Healthcare Playbook for 2029

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https://www.aei.org/commentary/the-democrats-already-have-a-healthcare-playbook-for-2029/?utm_campaign=22139279-ECON_NLR%20Vital%20Signs&utm_medium=email&_hsenc=p2ANqtz-_y1mg21d3JknEciULh5_aXyPYC2iUEkirlIFOZ9Gq7-WaC9Uxh0h2XeaWIxenX7YPGM5M7S3SdtaH2mJHs5Nu6EPSOvQ&_hsmi=446383067&utm_content=446383067&utm_source=hs_email

As the midterm elections approach, politicians are debating healthcare within the broader context of “affordability,” or, more precisely, the challenge voters say they are facing in paying their regular bills. An interesting battle within the Democratic Party is underway over the appropriate response to this concern, with some favoring Medicare for All and others voicing skepticism about that approach.

Leading congressional Democrats, including Sen. Ron Wyden of the Finance Committee, are hedging their bets, but the most likely scenario is still one of incrementalism rather than sweeping reform.

Medicare for All has always been more effective as a rallying cry for the Democratic Party than as a roadmap for getting a bill through Congress. Although many voters are exasperated with the state of American healthcare, support for Medicare for All falls when its costs, which are considerable, are made clear to survey respondents. There is also a broad lack of confidence in the government’s ability to competently manage healthcare insurance for the entire country.

A potential guide for what Democrats might do in lieu of Medicare for All can be found in a document posted in July by Wyden on behalf of many of his Senate colleagues. It lists scores of ideas for reforming healthcare insurance and care delivery, including through the possible adoption of Medicare for All, although the balance of the paper points toward more public control and regulation than a major push for a monolithic public plan.

Wyden is following the playbook Democrats used to successfully advance the Affordable Care Act (ACA) from 2008 to 2010. In the months leading up to the 2008 election, then-Senate Finance Committee Chairman Max Baucus had worked with outside experts and fellow Democrats to draft a white paper on healthcare, which he released just days after then-Sen. Barack Obama won the presidency. That document would serve as the blueprint for the bill Baucus would draft and pass in the Senate in 2009, which later became the foundational ACA law.

Many healthcare concepts that are now familiar because of their inclusion in the ACA were promoted in the Baucus white paper, including the individual mandate, new premium subsidies for non-employer coverage for individuals with incomes below 400 percent of the federal poverty line, a large Medicaid expansion, and accountable care organizations, which are provider-led—as opposed to insurer-owned—managed care plans.

Wyden is explicit in his July release that he views the development work conducted by Baucus before 2009 as a model for what he hopes to accomplish in the run-up to 2029. However, he framed the ideas presented in the July release not as proposals he supports but as ideas for which he is soliciting feedback (responses to his “request for information” are due by October 2). It is possible, depending on what occurs in November 2028, that Wyden will publish a more prescriptive plan after the election to signal more clearly his intentions for 2029.

Wyden’s document zeroes in on consumer dissatisfaction with aspects of private insurance and divides the ideas under review into three categories: lowering costs for consumers and making enrolling in insurance easier, removing barriers to accessing care and lowering administrative costs, and regulating the for-profit companies providing insurance and care to patients.

Some of the more noteworthy concepts included in the document include:

  • reversing most of the budget cuts and regulatory changes implemented during the second Trump administration
  • developing transition plans that might allow Medicare for All to be approved with less immediate disruption to the current coverage of many Americans
  • creating an option for states to offer single-payer coverage
  • creating a nationwide “public option,” sponsored and run by the federal government, that would be offered to consumers buying individual coverage through the exchanges established by ACA and which might use Medicare’s regulations to set reimbursement rates for services or allow the government to negotiate rates with the providers of services in each market
  • developing new Medicare or Medicaid “buy-in” options that could be offered to all Americans regardless of their employment status and incomes
  • creating a single online entry point for enrolling in coverage that both those getting employer-sponsored and non-group coverage could use
  • allowing states to add to essential health benefits based on emerging evidence of effective services
  • stricter state oversight over premium increases requested by insurance plans, potentially including caps
  • eliminating deductibles and coinsurance for some “non-shoppable” services, and applying lower limits on total annual out-of-pocket costs based on a person’s income
  • reinstating the enhanced premium credits in place from 2021 to 2025 that the GOP Congress allowed to expire
  • allowing the ACA premium credits to go to lower-income workers enrolled in employer coverage, which the current “firewall” prohibits and which might be provided irrespective of the share of the premium paid by workers, and
  • restricting the business practices of for-profit companies participating in the healthcare industry, including insurance companies, private equity investors, and other “middlemen”

The connecting theme behind these ideas is a publicly regulated system, with the government taking on the responsibility of providing affordable coverage options for all Americans, with cost-sharing that is capped relative to household income. Wyden and other Democrats are willing to consider all manner of new controls and subsidies to ensure these objectives are achieved, but it is of course easier to promise these outcomes than to deliver them. An especially formidable obstacle is likely to be the service providers who believe Medicare and Medicaid’s payment rates are too low to serve as guides for private coverage too. Cutting payments to all providers is easier than designing reforms that more precisely target waste and inefficiency, but the ability of Democrats to overcome industry opposition to payment reductions in 2029, as they did when writing the ACA, is not assured.

In addition, even with some provider cuts, the aggregate federal cost of a plan that includes some of the more prominent ideas in the Wyden plan (not including Medicare for All), could be significant. For instance, the Congressional Budget Office has estimated that rolling back policies that tightened administration of the ACA credits, along with reinstating on a permanent basis the enhancement of the credits originally approved in 2021, would increase projected federal budget deficits by $662 billion over 10 years. Democrats are certain to favor tax hikes on well-to-do Americans in 2028, but it is not yet clear that those potential sources of new revenue would be sufficient to fully offset the most expensive ideas the Wyden document teases.

The heavy investment Senate Democrats are making in the development of their 2029 agenda for healthcare contrasts with the GOP’s approach, which is less focused. The Trump administration released a one-page framework earlier this year (“The Great Healthcare Plan”), but there has been little follow-up and no visible movement among congressional Republicans to approve new legislation.

Republicans should take the Wyden document seriously. If voters opt once again for change in 2028 rather than continuity, it is near certain Democrats will use the power voters granted them to prioritize passage of a major healthcare bill. The GOP could make that scenario less likely to occur if it developed, promoted, and tried to advance an alternative approach. There are multiple sound ideas they could embrace to make healthcare more affordable without excessive reliance on public regulation, such as by allowing consumers to keep the savings when they choose lower-cost insurance and care providers. Refining those ideas and putting them into legislation would put the party in a better position to compete with what is coming from their opponents in both 2026 and 2028.

Rising Employer-Sponsored Insurance Premiums Will Add to the Pressure for Reform

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https://www.aei.org/economics/health-care/rising-employer-sponsored-insurance-premiums-will-add-to-the-pressure-for-reform/?utm_campaign=22139279-ECON_NLR%20Vital%20Signs&utm_medium=email&_hsenc=p2ANqtz-8g6lt7Hk3NzQphj_eCzZIp60IBZq-hltXq3x0pLPKVdOXcilVfUTN56KoPSWkGceDBpsyWTTeyLdDahe9bGntortL1vQ&_hsmi=446383067&utm_content=446383067&utm_source=hs_email

The consultants agree: Healthcare premiums in 2027 for employer-sponsored insurance (ESI) are going up once again at an exceptionally elevated rate. As has been the case in all the years since the COVID-19 pandemic ended, the forces driving costs higher are overwhelming those working in the other direction. The added pressure from yet another year of significant premium hikes is likely to further intensify voter interest in a political response.

As employers get set to administer their open enrollment seasons for 2027 workplace benefit programs, a consensus has emerged among the outside firms monitoring trends in this sector that ESI is going through a sustained period of unusually rapid cost growth.

  • WTW (rebranded from Willis Towers Watson) projects that total costs for ESI will rise by 11.1 percent in 2027, which the firm says is the highest annual rate increase it has observed in two decades.
  • Aon forecasts a 9.5 percent increase for 2027, which would come on top of an 8.3 percent jump in 2026.
  • Marsh (previously Mercer) expects a modestly slower growth rate in 2027 of 8.2 percent after taking into account coverage adjustments, such as higher deductibles. The firm says the 2027 increase comes after a 6.7 percent rise in 2026 and 6.0 percent in 2025.
  • PricewaterhouseCoopers (PwC) predicts a 9.0 percent increase in covered medical expenses, on average, for ESI plans in 2027, which is the same rate it found for 2026 and slightly above the 8.5 percent rate it observed in 2025.

The PwC report points to multiple sources for ESI cost growth above general consumer inflation:

  • New AI Tools. Hospitals and physician groups are using artificial intelligence (AI) to maximize what they get paid for every interaction they have with patients. Insurers also have new AI platforms to better identify opportunities for cutting costs, but, to date, the provider-focused products are having more of an effect on total costs.
  • Provider Consolidation. Employers continue to struggle to hold down payment demands made by dominant health systems. With the industry already heavily consolidated, insurers have limited options to work around the major players.
  • Pharmaceutical Spending. Price increases for specialty therapies and expanded use of GLP-1s are pushing up drug costs.
  • Behavioral Health. Utilization of covered mental health services remains on a steep upward trajectory, with cumulative growth of 62 percent over the six-year period 2018 to 2024.
  • The Unintended Fallout from the No Surprises Act (NSA). Congress approved the NSA assuming it would lower overall costs for consumers, but it has had the opposite effect because physicians keep winning in arbitration. The added costs have grown to the point that they are noticeable in ESI premiums.

With cost pressures building, one might expect big employers to become more assertive in pushing for lower costs, yet WTW found continued reluctance among employers to take on the healthcare sector. In its survey, only 15 percent of the firms responding said they would be willing to back disruptive changes to secure a 5 percentage point drop in premiums. Further, 61 percent said they preferred to avoid upsetting their employees to securing meaningful cost reductions from disruptive ESI changes.

These findings confirm that the ESI market suffers from a collective action problem. Firms offering healthcare coverage want to attract the best workers possible within the budgets they allocate to labor costs. They do not want to develop reputations for offering less generous ESI than their competitors. Moreover, individual firms generally do not wield sufficient market power to change the business practices of major health systems.

The inability of employers to solve this problem on their own is certain to increase the pressure on Congress to provide a fix through legislation. In the coming years, many policymakers could get behind some version of additional rate setting in the ESI market to put a lid on premium growth.

Elected officials who might be wary of such remedies need to consider what they would offer as an alternative.

One option would be to force firms with ESI to run something like a premium support plan. Workers would get fixed levels of subsidization from their employers, which they would then apply to the plans they prefer rather than to the plans their companies choose on their behalf. The offered plans would need to be standardized (to a degree) to allow for apples-to-apples premium comparisons. This design would move responsibility from the firms to the workers to make economizing choices, with a strong likelihood of producing better results. Many employees might gladly accept coverage with market-disrupting changes if doing so would increase their take-home pay.

340B Rebate Fight Puts Hospital Cash Flow on the Line

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https://www.healthleadersmedia.com/cfo/340b-rebate-fight-puts-hospital-cash-flow-line

A new lawsuit from the American Hospital Association and four safety-net hospitals challenges a proposed federal drug rebate model, raising fresh concerns about liquidity, administrative spending and the financial stability of providers.

KEY TAKEAWAYS

Hospitals would pay wholesale prices for certain drugs upfront and seek 340B discounts through rebates.

Hospital groups estimate annual administrative expenses could exceed $1 billion, nearly double the federal government’s estimate of approximately $537 million.

The revised pilot is scheduled to begin January 1, 2027, but a new legal challenge could disrupt implementation.

The financial stakes of the federal 340B Drug Pricing Program are back in court. The American Hospital Association (AHA), the Maine Hospital Association and four safety-net hospitals filed a federal lawsuit October 9 seeking to block a revised rebate pilot that could change how participating providers obtain discounts on certain outpatient drugs.

The plaintiffs also requested a temporary restraining order to prevent the program from taking effect January 1, 2027. They argue that the Department of Health and Human Services (HHS) and the Health Resources and Services Administration (HRSA) failed to adequately assess the program’s financial consequences and consider less burdensome alternatives.

Under the current 340B model, eligible hospitals generally purchase covered outpatient medications at discounted prices. The revised pilot would instead require providers to buy participating drugs at wholesale acquisition cost, submit claims data and receive rebates for the difference between that price and the 340B ceiling price.

That change could create a significant working-capital challenge. Hospitals would have to front more money for medications and wait for rebates, while also managing claims submissions, payment reconciliation, potential denials and additional compliance work.

The cost estimates are the real disagreement. Hospital analyses cited by the AHA put annual administrative expenses above $1 billion, compared with the federal government’s estimate of roughly $537 million. The hospital groups contend that the government failed to fully account for startup costs, staff training, vendor expenses and the financial burden of advancing funds for drug purchases.

For hospitals operating on narrow margins, those expenses could have consequences well beyond the pharmacy department. Maine Hospital Association President Jeff Austin has said hospitals in the state average less than two weeks of cash on hand, underscoring how quickly additional working-capital demands could become a liquidity concern.

The HRSA, meanwhile, says the rebate model would improve transparency and program integrity by allowing individual transactions to be verified before rebates are paid. The agency also says the approach would help prevent overlapping discounts under 340B and the Medicare Drug Price Negotiation Program. The pilot is voluntary for manufacturers, and HRSA has approved plans from 10 manufacturers covering 18 drugs for the planned January launch, according to the lawsuit.

What CFOs should be watching

A shift from upfront discounts to retrospective rebates could increase cash-conversion-cycle pressure, require new investments in revenue-cycle and pharmacy systems, and expose hospitals to reconciliation delays. CFOs should therefore model potential cash requirements, assess vendor and staffing needs, and coordinate with pharmacy, compliance and legal teams rather than waiting for the litigation to conclude.

If the plaintiffs’ cost projections prove accurate, hospitals may have to redirect funds from patient assistance, specialty services and other community programs to cover administrative overhead and drug purchases. Smaller rural providers could be especially vulnerable because they have fewer reserves to absorb delays.

This is not the first legal challenge to the rebate approach. A federal judge temporarily blocked the original pilot in December 2025, and HHS later withdrew that version. HRSA announced the revised program in August 2026, but the latest lawsuit puts its planned launch back in question.

For now, CFOs should treat January 2027 as a planning deadline, not a settled outcome. The ultimate decision could shape how hospitals manage drug costs, liquidity and 340B-funded services for years to come.

Hospital Finance: Things to Know

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https://www.beckershospitalreview.com/finance/the-hospital-finance-divide-15-things-to-know/?origin=BHRSUN&utm_source=BHRSUN&utm_medium=email&utm_content=newsletter&oly_enc_id=2882E3284256E4W

Hospital and health system margins are beginning to reveal two different realities as a growing number of hospitals lose money and cut costs while the strongest add services, shed what doesn’t fit and post gains.

The gap shows struggling facilities like Watsonville (Calif.) Community Hospital that are down to just eight days of cash on hand, while systems like Durham, N.C.-based Duke University Health System reported an operating income of $453.1 million (5.4% margin) in fiscal year 2026, up from an operating income of $179 million (2.5% margin) in fiscal 2025.

Here are the numbers and moves defining the hospital finance divide as hospitals head into 2027.

THE NATIONAL PICTURE

1. More hospitals are losing money. A Kaufman Hall “National Hospital Flash Report” from Oct. 13 found that 43% of hospitals are operating in the red, up from 33% prior to the COVID-19 pandemic. The report pulled from August 2026 financial performance data from 1,300 hospitals.

2. Margins slid through the summer. The average hospital margin fell to 1.8% in August, down from 3.8% in July and 5.6% in June.

3. Geography matters. In August, hospital margins were down 2 percentage points compared with the same month in 2025. Margins rose 5% year over year in the Northeast/Mid-Atlantic but fell 18% in the Great Plains.

4. Revenue is up, but costs and bad debt are increasing faster. Operating revenue per day increased 6% year over year in August. Total expenses have increased 21% over the last three years, with drug expenses up 29%, supply expenses up 25% and labor expenses up 16%. Bad debt and charity care per calendar day increased 13% year over year and 49% over the last three years.

SYSTEMS PULLING AHEARD

5. For-profits remain ahead. Nashville, Tenn.-based HCA Healthcare, which is scheduled to report its third-quarter results Oct. 27, reported a net income of $1.7 billion (8.4% margin) in the second quarter of 2026, roughly flat compared with $1.7 billion (8.9% margin) in the second quarter last year. HCA, Dallas-based Tenet Healthcare and King of Prussia, Pa.-based Universal Health Services have also outpaced the broader market since June 30, even as they split their outlooks for the rest of the year.

6. Certain nonprofits are posting big margin gains. Duke Health’s operating margin for fiscal 2026 was 5.4%, compared with an operating margin of 2.5% for fiscal 2025. Livonia, Mich.-based Trinity Health also saw $281 million in operating income (1.1% margin) in fiscal 2026, up from a $12.2 million operating loss (0% margin) in fiscal 2025.

7. Turnarounds are working. West Reading, Pa.-based Tower Health achieved a positive operating income for the first time in nearly a decade. President and CEO Michael Stern told Becker’s the system is shifting from stabilization toward strategic investment and sustainable growth. St. Louis-based Ascension also completed a $3 billion turnaround in three years, with the system reporting a $120 million operating loss (-0.2% margin) in fiscal 2026, a $371 million improvement from the prior year.

8. System investments reach beyond hospitals. Phoenix-based Banner Health has bet on ASCs and insurance to grow. In 2018, the system entered a joint venture partnership with Phoenix-based Atlas Healthcare Partners to build and operate a network of ASCs in Arizona, Colorado and Wyoming. Additionally, just under 20% of Banner’s total revenue comes from insurance premiums, with its long-term financial strategy including an increase in that share. Ascension also just wrapped its $3.9 billion acquisition of AmSurg in June, growing its ASC footprint from 58 centers to more than 300 across 34 states.

THE HOSPITALS FALLING BEHIND

9. Cash is the strongest divider. An Aug. 13 Moody’s Ratings report found that median days cash on hand was 280 for Aa-rated nonprofit systems, 191 for A-rated systems, 117 for Baa-rated systems and 71 for systems rated below Baa.

10. Some hospitals are down to days, not months, of cash. Watsonville Community Hospital faces “a serious financial gap” with just eight days of cash on hand. Its interim CEO Tim Moran warned the hospital could close within six to 12 months without action.

11. Downgrades are piling up. Becker’s has tracked 19 health system rating downgrades in its latest roundup. Most recently, Ashtabula, Ohio-based ACMC Healthcare System’s credit rating was downgraded to “BBB” from “BBB+” by Fitch. The downgrade reflected deterioration in the system’s liquidity since fiscal 2023.

12. Federal scrutiny has added pressure. An Oct. 8 inspection report obtained by Becker’s found Central Maine Medical Center in Lewiston is at risk of losing Medicare funding after CMS found it out of compliance with three of the program’s conditions of participation.

13. Rural hospital exposure remains high. More than 40% of rural hospitals operate at a loss, according to an Oct. 13 AHA report. Becker’s has reported on just six planned hospital and emergency department closures in 2026, but at this point in 2025, Becker’s had already reported on 22. While this may be viewed positively, many healthcare leaders feel the financial strain hasn’t eased and is showing up in areas like service line cuts and rural emergency hospital conversions and consolidations.

HOW SYSTEMS ARE RESPONDING

14. Workforce cuts aren’t slowing down. Becker’s has reported on 68 hospitals and health systems that have announced job cuts in 2026. In recent months, four systems have also cut corporate and administrative support roles while protecting positions focused on patient care.

15. Portfolios are being reshaped. Many large systems are divesting assets, exiting joint ventures and calling off deals. At the same time, hospital and health system mergers and acquisitions in 2026 have already surpassed 2025 numbers, and are set to see their busiest year since the pandemic. Since 2020, at least 23 health systems have formed or taken new identities through mergers, new launches or rebrands.