Hospitals are absorbing a sharp rise in unpaid bills as ACA coverage erodes, and ASC leaders say the same affordability gap is hitting elective cases.
Bad debt and charity care per calendar day rose 49% in the first eight months of 2026 compared with the same period in 2023, according to Kaufman Hall’s National Hospital Flash Report, which tracks more than 1,300 hospitals.. Year to date, the figure is up 15% from 2025, while net operating revenue per day grew 6%. Hospitals’ national median year-to-date operating margin fell to 2.5% in August from 3.8% in July.
The Midwest saw the steepest climb, with bad debt and charity care per day up 78% in the first eight months of 2026 compared with the same period in 2023. The South posted the largest year-over-year jump, up 24% from August 2025 to August 2026.
Enhanced ACA premium tax credits expired at the end of 2025 after Congress failed to extend them. The House passed a three-year extension in January, but the measure was not expected to pass the Senate, and President Donald Trump said Jan. 11 he might veto an extension. A bipartisan Senate compromise on a two-year extension stalled later that month.
Coverage losses followed. Individual market enrollment fell 18% from June 2025 to June 2026, a loss of more than 4.6 million people, according to a KFF analysis. Enrollment had grown 7% the year before.
Patients who kept coverage often traded down. The average ACA deductible rose 37% in 2026 to a record $3,786, and the average bronze deductible hit $7,476, per KFF data. The share of enrollees choosing silver cost-sharing reduction plans fell to 37%, the lowest on record and down from more than half the year before.
Hospital leaders said the shift shows up as self-pay. Jason McNeil, CFO of Pascagoula, Miss.-based Singing River Health System, said the system has seen “a tremendous uptick in self pay and almost a dollar for dollar downtick in our exchange plan business.”
“If your deductible and your out-of-pockets are in the $20,000, $25,000, $30,000, you do not have insurance,” said Claudia Emami, MD, chief medical officer of Ascension Sacred Heart Emerald Coast in Miramar Beach, Fla.
ASC leaders saw this coming. In December 2025, Vamsi Kancherla, MD, of Gainesville, Ga.-based Specialty Orthopedics, projected a 10% to 20% drop in elective spine case volume within a year at practices that rely heavily on commercially insured or marketplace patients if the credits lapsed. Ambulatory Surgery Center Association CEO Bill Prentice warned that millions of Americans could face much higher costs or go without insurance.
In January, Patrick Magallanes, president and CEO of North Liberty, Iowa-based Steindler Orthopedics, named “the widening affordability gap for patients” as the biggest risk to Steindler’s ASC growth this year. He said many patients are “effectively self-pay at the time of surgery,” which he tied to more cancellations, slower collections and tighter margins.
The pressure lands differently on ASCs than on hospitals. Martha Henley, CEO of Manchester, Tenn.-based Unity Medical Center, said most of the hospital’s charity care and bad debt comes from the emergency department, where hospitals must provide care regardless of ability to pay. ASCs schedule elective cases in advance, which lets them verify benefits and collect upfront, but also lets patients delay or cancel.
The pressure is unlikely to ease in 2027. Hospital leaders expect Medicaid cuts in HR-1 to add to uncompensated care, and insurers requested a median 15% premium increase for 2027 ACA plans, according to KFF data.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.
