North Texas hospitals provide billions in uncompensated care. ACA changes could increase that burden

A Texas health leader estimates hospitals could be responsible for more than $1 billion in additional uncompensated care if federal lawmakers don't extend a subsidy that makes health insurance on the federal marketplace more affordable.

Hospitals across the state already provide billions of dollars in uncompensated care — that consists of bad medical debt, or care that someone chooses not to pay for, and charity or indigent care provided to people who have financial challenges and can't pay. Nonprofit hospitals are legally required to provide charity care.

"Hospitals give care back to the community," said Stephen Love, president and CEO of the Dallas-Fort Worth Hospital Council. "In many cases, especially if it's an emergency, they're going to do the right thing and treat the patient."

But he and other health care leaders worry an increase in uncompensated care costs could mean a loss of vital services, or even hospital closures.

The hospital council's economic impact study found that 89 hospitals in North Texas provided almost $7 billion in uncompensated care last year. Love said the cost in Texas is higher than other states because it has the worst uninsured rate in the country.

As the government shutdown continues over a push to extend enhanced premium tax credits designed to make Affordable Care Act marketplace coverage more affordable, the credits are set to expire at the end of the year, which would more than double premiums for 2026 plans, on average.

Experts expect that to increase the uninsured rate significantly. If the tax credit isn't extended, researchers estimate more than 1.5 million Texans could lose coverage.

"Unfortunately, with this amount of uncompensated care and this amount of uninsured people, many people are using the emergency room as their primary care provider," Love said. "When someone presents in a very emergency situation at your emergency room, you have to render treatment. It's the right thing to do. It's the moral thing to do, and hospitals do it regardless of a patient's ability to pay."

Love said as people lose coverage and hospitals must accommodate, health care leaders may have to make difficult decisions about what facilities can offer.

"You don't want to lose all your services, so they may have to stop one service so that it frees up and ensures that you can continue your other services," Love said.

Hospitals evaluate what care is utilized, the return on investment and several other factors when making those types of decisions.

In addition to the 14 Texas hospitals that have closed in the past decade, more than half of the state's rural hospitals are at risk of closing and even more are at risk of losing services. That can include clinics and urgent care centers that hospitals have spent a lot of time building up.

"When you look at rural hospitals, there's a shortage anyway to recruit OB-GYN professionals to rural areas," Love said. "That's one that you really have to look at potentially that could be cut."

While the increase in uncompensated care will pose a challenge to hospitals, it's also not the only thing hospitals have to be prepared for. They are also facing less revenue through health care programs, like Medicaid and Medicare, due to federal policy changes.

"This is almost a perfect storm," Love said.