Florida Healthcare Organizations Face Revenue Changes as Insurance Subsidies End

Healthcare organizations in Florida are preparing for potential changes in patient volume and payment patterns as enhanced Affordable Care Act subsidies approach their expiration date. According to the Palm Beach Post, about 4.6 million Floridians currently receive health insurance through the government-supported Health Insurance Marketplace, representing approximately 25% of those under age 65 in the state.

The subsidies, which were introduced in 2021 during the COVID-19 pandemic and renewed in 2022, are set to expire on January 1, 2026. Most marketplace enrollees currently qualify for these enhanced subsidies, which appear as premium tax credits.

How the System Currently Works

The subsidy structure caps the amount families pay for healthcare insurance at 8.5% of annual household income. When enrollees purchase an Obamacare health insurance policy, they simultaneously apply for the subsidy. These tax credits are typically taken up front and paid directly to insurance companies, resulting in an immediate reduction in premiums.

The credit amount depends on family size, income, age and location. Before the enhanced subsidies began in 2021, no one earning more than 400% of the poverty level could qualify for assistance. The expansion broadened eligibility to include more middle-income families.

Mary Mayhew, president and CEO of the Florida Hospital Association, estimates the change may put 1 million Floridians at risk for losing access to health insurance coverage. Mayhew, who previously served as a senior health administrator under the first Trump administration, notes that without premium assistance, workers who own and support small businesses may lose access to primary care and comprehensive health services.

Florida’s large number of small businesses and gig workers contributes to high marketplace enrollment. The government-subsidized marketplace was designed specifically for workers without access to employer-sponsored health insurance.

Financial Implications for Healthcare Providers

Holly Bullard, chief strategy and development officer for Florida Policy Institute, describes the subsidies’ expiration as a significant threat to Floridians’ well-being. She predicts that if healthier enrollees drop their insurance due to cost increases, prices may rise for all health insurance consumers.

Arthur Novoseletsky, senior vice president at Brown & Brown Insurance Brokerage, anticipates a large number of people may go without insurance. These individuals may still need to seek care and turn to public health hospital systems, which create costs for taxpayers and increase providers’ uncompensated care burdens.

Industry observers note that the loss of current subsidy levels may increase the number of people without insurance along with bad debt and charity care that hospitals provide. Novoseletsky projects premiums may increase 18% to 20% on the individual policy side, while employee health plans’ costs may rise in the low double digits.

Understanding these market dynamics helps healthcare organizations across Florida prepare their revenue cycle management strategies and financial projections for 2026.

Planning Considerations for Healthcare Organizations

Jay Wolfson of the University of South Florida Health notes that before enhanced subsidies began in 2021, some enrollees paid up to $24,000 in deductibles and premiums before coverage started. A return to that structure may affect how patients access care and manage their healthcare spending.

Healthcare organizations should consider how potential increases in uninsured patients may affect collections, bad debt reserves and charity care obligations. Changes in patient insurance status often require adjustments to financial reporting processes and operational budgeting.

The Congressional Budget Office had estimated that making the enhanced subsidies permanent would have added $350 billion to the national debt over ten years. With that extension off the table, healthcare providers in Florida face the prospect of serving more uninsured patients while managing their own financial sustainability.

Next Steps for Healthcare Leaders

Healthcare executives across Florida should review their current payer mix and assess potential exposure to uncompensated care increases. Organizations may want to evaluate their collection processes and consider how shifts in patient insurance coverage affect cash flow projections.

Working with experienced healthcare advisors can help organizations prepare financial models that account for these market changes. Our team helps hospitals, clinics and medical groups plan for regulatory and reimbursement shifts that affect their financial health. Connect with our healthcare team to discuss how these changes may impact your organization.

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