CBO REPORT ON FINANCIAL PRESSURES FACING HOSPITALS

Changes stemming largely from implementation of the Affordable Care Act (ACA) could affect hospitals’ finances significantly. Although the ACA reduces Medicare’s payment updates for hospitals, it also expands insurance coverage, which should reduce hospitals’ costs for uncompensated care. To examine the effects of those and other provisions of federal law, a paper from the Congressional Budget Office (CBO) calculates hospitals’ profit margins and the share of hospitals that might lose money in 2025 under several illustrative scenarios.

The paper can be accessed at https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/workingpaper/51919-Hospital-Margins_WP.pdf.