New Study Predicts 50-75% Increase in U.S. Hospitals’ Financial Deficits

Hospitals Face Growing Financial Challenges with Potential Increase in Deficits

Over 600 hospitals in the United States, deemed financially vulnerable, are projected to see their financial deficits swell by 50 to 75 percent. This alarming forecast is detailed in a recent study by National Nurses United (NNU), raising concerns over the potential reduction or closure of essential healthcare services for millions nationwide.

The report, titled “A Preventable Crisis,” examines the effects of three simultaneous federal healthcare funding cuts on hospitals across the nation. The most significant financial impact arises from the reduction of $1 trillion in healthcare funding, following the passage of H.R. 1 in July 2025. This legislation notably affected Medicaid and Affordable Care Act subsidies while offering tax benefits to high-income households.

“The research is clear: Hundreds of communities nationwide stand to lose access to life-saving care because national leaders chose to prioritize the interest of the wealthiest Americans,” stated NNU President Jamie Brown, RN. “The true cost of the federal government’s misplaced priorities will not be measured in the balance sheets of hospitals. Instead, the true cost – and what keeps nurses up at night – will be the consequences of our patients delaying emergency care and abandoning preventative services, as well as mounting financial burdens on working families and weakening local economies.”

An examination of the past five years of financial data from over 3,900 hospitals enabled NNU to pinpoint 602 hospitals facing financial vulnerabilities, with a collective deficit of $10.16 billion prior to any cuts. The anticipated federal cuts could exacerbate this deficit by an additional $5.21 to $7.72 billion when H.R. 1 is fully implemented.

The total projected deficit, ranging from $15.37 to $17.88 billion, threatens to impact:

• 131 Critical Access Hospitals, essential for rural regions, potentially losing emergency and inpatient services;
• 469 Short Term Acute Care hospitals, crucial for inpatient admissions and emergency visits in urban and suburban locales;
• Communities, both rural and metropolitan, with 40 percent of vulnerable hospitals in rural areas, and 60 percent in metropolitan regions serving as safety-net providers;
• Numerous states, particularly California (67), New York (40), Texas (35), Oklahoma (27), Kansas (23), and Alabama (23), which house the highest numbers of at-risk hospitals;
• States without Medicaid expansion, where hospitals could suffer revenue declines due to the ACA subsidy expiration, such as Florida (12), Georgia (10), Texas (35), Mississippi (19), South Carolina (7), Alabama (23), and Tennessee (17).

The federal cuts originate from three main sources:

1. A mandatory two percent Medicare sequestration due to federal debt;
2. An anticipated 10 to 18 percent reduction in Medicaid funding under H.R. 1;
3. The expiration of ACA marketplace subsidies, varying by state.

NNU’s report suggests three policy changes, including reversing the federal cuts and establishing a federal aid program for financially at-risk hospitals. This program would ensure access to essential care by reimbursing hospitals at 101 percent of costs for Medicaid and Medicare.

“We are hurtling toward a loss of health care services that will be unsustainable for hundreds of communities and the millions of Americans they serve,” expressed NNU Executive Director Puneet Maharaj. “If legislators act now, we can save our hospitals before closures, service eliminations, and health crises take place. Without action, we are choosing a path of irreversible harm to patients, to communities, and to public health.”

The full report is accessible here.

Red Alert Save Our Hospitals Initiative

To combat the looming threat to over 600 hospitals, National Nurses United has initiated the Red Alert tour. This campaign seeks to raise community awareness and bolster support for healthcare reforms. The tour has already reached cities such as Glendale, Oceanside, Alameda, and Oroville in California; Minneapolis, Minnesota; and Kalamazoo, Michigan.

“Nurses reject the deadly agenda of the billionaire class and their Republican puppets,” commented NNU President Jamie Brown, RN. “We’re taking the wheel and bringing our vision for a healthy society directly to patients and communities who will bear the brunt of Republican policies. We invite everyone who has felt abandoned by the political system to join us and build real working-class solidarity.”

In addition to the report’s policy recommendations, NNU supports Senator Bernie Sanders’ tax proposals, aiming to reform the U.S. tax system and generate revenue. This plan would help keep healthcare accessible and promote Medicare for All, alongside improvements in housing, education, and job opportunities. Sanders, with Representative Ro Khanna, has also introduced the Make Billionaires Pay Their Fair Share Act, proposing a five percent annual wealth tax on billionaires to fund initiatives such as reversing H.R. 1 Medicaid cuts and expanding Medicare benefits.

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