Auto logout in seconds.
Continue LogoutMedicaid cuts and coverage losses could intensify financial pressure on health systems — but leaders aren't waiting to respond. See how six health systems are preparing for increasing uncompensated care.
The One Big Beautiful Bill Act, which was signed into law on July 4, 2025, includes over $1 trillion in cuts to federal healthcare programs, including Medicaid and Medicare. Because of these funding cuts, as well as more stringent eligibility requirements, almost 10 million people are expected to lose Medicaid coverage.
In addition, the expiration of enhanced subsidies for Affordable Care Act (ACA) plans has led a significant rise in premiums while enrollment continues to drop. At the end of March, CMS data showed initial enrollment in ACA plans dropping by 5%, or 1.2 million people, in 2026 compared to 2025.
Amid these changes, many health systems are increasing their efforts to help patients keep coverage while also adjusting their financial strategies to accommodate a projected increase in uncompensated care.
Michelle Bruhn, CFO at Phoenix Children's, said the organization has turned to scenario modeling and smart budget planning to prepare for lower Medicaid reimbursement and ensure it can still invest in care. The organization also has a strong partnership with Arizona's Medicaid agency, which offers health insurance through KidsCare.
Bruhn also highlighted the importance of donor support in helping the pediatric health systems sustain access. Currently, philanthropy funds over 170 programs and services at the health system.
At Northwell Health, CFO Michele Cusack highlighted the importance of using data to identify and educate patients before they lose coverage and working with community and faith-based partners to advance health. Northwell's community health workers and financial counselors are also actively screening and re-enrolling patients in Medicaid coverage directly in EDs and practices with high Medicaid use.
Similarly, Sharp HealthCare is strengthening its front-end financial counseling and eligibility screening process to help connect patients with all available coverage options, including Medicaid and financial assistance programs.
"We are also investing in digital tools and analytics that help us identify patients at risk of losing coverage and engage them earlier in the process," said Susan Green, CFO at Sharp HealthCare. "From an operational perspective, we continue to emphasize efficiency and cost discipline across the organization."
At Wellstar Health System, leaders are assessing the organization's structure and processes, finding opportunities for continuous improvement, and becoming more agile to improve access to care. This includes utilizing new technology like AI to improve safety, quality, and the patient experience.
"By thoughtfully adapting our model with a future-focused outlook, we will bend the cost curve to adapt and strengthen our operational and financial stability while enabling scalable, sustainable growth," CFO John Kerndl said.
According to Nick Olson, CFO at Sanford Health, the health system is taking a disciplined approach, which includes continuous financial planning, operational efficiency, and investments in technology and process transformation. Currently, Sanford is working on a patient access transformation initiative and investing in health guides, virtual care, predictive analytics, and more.
Rick Talento, CFO of Inova Health, said the health system has been preparing for these challenges for several years by focusing on its Inova Cares network, which provides primary care, women's health, pediatric, and behavioral health services to patients who are uninsured, covered by Medicaid, or the system's charity care program.
"As coverage shifts, we are continuing to strengthen these access points and invest in new providers," Talento said. "We are expanding our patient-navigation and eligibility efforts across inpatient, outpatient and community settings."
Sebastian Beckmann, a managing director at Advisory Board, highlighted research on what healthcare leaders are prioritizing amid ongoing policy, financial, and operational uncertainty.
In a report, Advisory Board researchers interviewed over 150 U.S. healthcare executives to understand how they were navigating policy uncertainty, financial strain, and operational complexity.
During the interviews, executives emphasized that federal policy dynamics continue to be complex and that the pressures from these changes will compound existing challenges, including an aging population, shifting payer mix, rising administrative burden, and staffing shortages.
"We're not preparing for a storm, we're preparing for climate change," one executive said. Recent policy changes have pushed healthcare leaders to prepare for more long-term changes to business pressures.
Among the executives, operational efficiency emerged as a consistent goal to improve performance and ensure financial sustainability. Beckmann also emphasized the need for operational efficiency since not all health systems will be able to win commercial patient volumes.
Separately, Cory Feldman and Dennis Glidewell, both managers at Optum Advisory*, said "[t]he real risk [to health systems] is not Medicaid reimbursement reductions alone."
Instead, they said "the larger financial threat is the growth of uninsured and underinsured patient populations, which will drive increased uncompensated care, bad debt, and financial pressure across health systems."
"Patient access is no longer simply an operational function; it has become a critical margin protection strategy," Feldman and Glidewell said. "Organizations that proactively identify coverage risk, intervene early, and redesign patient access processes will be better positioned to protect revenue and maintain access to care. AI-enabled analytics and outreach can also help identify patients at risk of coverage loss and support more proactive financial clearance strategies."
*Advisory Board is a subsidiary of Optum. All Advisory Board research, expert perspectives, and recommendations remain independent.
(Hudson, Modern Healthcare, 7/20)
Create your free account to access 1 resource, including the latest research and webinars.
You have 1 free members-only resource remaining this month.
1 free members-only resources remaining
1 free members-only resources remaining
You've reached your limit of free insights
Never miss out on the latest innovative health care content tailored to you.
You've reached your limit of free insights
Never miss out on the latest innovative health care content tailored to you.
This content is available through your Curated Research partnership with Advisory Board. Click on ‘view this resource’ to read the full piece
Email ask@advisory.com to learn more
Never miss out on the latest innovative health care content tailored to you.
This is for members only. Learn more.
Never miss out on the latest innovative health care content tailored to you.