Alabama hospitals brace for impact as Affordable Care Act tax credits set to expire

BIRMINGHAM, Ala. (WBRC) - Leaders in Washington are set to vote this week on a three-year extension of the enhanced Affordable Care Act (ACA) tax credits. The tax credits are currently set to expire at the end of 2025, which would have a major impact on Alabama hospitals.

Danne Howard, president and CEO of the Alabama Hospital Association, said the financial strain currently on the state’s hospitals is the worst she has seen in her 30-year career. She said the expiring premium tax credits would not have an immediate impact but rather one that will build over time.

Howard estimates that 100,000 Alabamians will lose health care coverage if the tax credits expire.

“There’s a reason why they have a subsidized plan, and that’s because they couldn’t afford it; they’re working but can’t afford the cost of an insurance plan fully,” Howard said. “Plus everything else, like your expenses in life.”

Howard said when people lose coverage, they lose access to routine care. When that happens, uninsured people will go to the emergency room when seeking primary care.

“If we are looking at the potential of adding another 100,000 individuals into our uninsured population, then that just adds to a stressor that is already straining hospital finances and hospitals’ ability to do what they do,” Howard said.

Howard said Alabama hospitals are currently paying $650 million on average for uncompensated care. That is when hospitals pay for the care a patient receives, and there is a greater number of uninsured patients in rural areas.

Howard also said increased emergency room traffic from people losing insurance will lead to longer wait times for everyone else.

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