Wisconsin Hospitals See 30% Spike in Unpaid Care

Wisconsin hospitals provided $1.77 billion in uncompensated care during 2024, marking a 30.5% increase from the $1.36 billion recorded in 2023, according to the Wisconsin Hospital Association’s annual report released in October 2025. The sharp rise reflects growing financial pressure on healthcare organizations as more patients struggle to cover out-of-pocket costs and insurance coverage gaps widen.

Kyle O’Brien, president of the Wisconsin Hospital Association, noted that while hospitals showed modest financial improvement compared to the previous two years, 40 facilities still operated with negative margins. The increase in unpaid care stems from multiple factors, including rising insurance deductibles, insufficient Medicaid reimbursements and the looming expiration of federal marketplace subsidies.

Rising Deductibles Push Costs to Hospitals

Higher deductibles on health insurance plans are forcing patients to shoulder more upfront costs before coverage begins. When patients cannot afford these out-of-pocket expenses, hospitals must either pursue collections or absorb the costs through charity care programs. O’Brien explained that if patients cannot pay higher out-of-pocket expenses, hospitals either try to collect those dollars or provide relief through charity care and bad debt policies. This trend affects healthcare organizations across the country.

Medicaid Reimbursement Gaps Create Financial Strain

Wisconsin’s state budgets have increased Medicaid hospital payments over the past decade, with the 2025-27 budget containing the largest increases to date. However, O’Brien said these reimbursements still fall short of covering the actual cost of care that Medicaid is supposed to cover.

Insurance denials from both group health plans and Medicare Advantage policies add another layer of complexity. O’Brien described denials as a source of general consternation for hospitals. Medicare Advantage policies are sold by private insurers to people eligible for the federal Medicare program. Understanding reimbursement patterns and optimizing billing practices becomes critical for hospitals operating on narrow margins.

Expiring Federal Subsidies Threaten Coverage

The enhanced premium tax credits for HealthCare.gov marketplace plans, enacted in 2021, are set to expire at the end of 2025 unless Congress renews them. Without these subsidies, Wisconsin’s Office of the Commissioner of Insurance projects substantial premium increases for 2026. The hospital association expects enrollment declines as consumers facing higher costs choose to go without insurance.

Federal law requires hospitals to treat patients regardless of their ability to pay, meaning coverage losses directly translate to increased uncompensated care. The Wisconsin Hospital Association has been advocating with congressional representatives to reauthorize the enhanced tax credits. O’Brien noted that members of Congress have been focused on other issues but understand hospital concerns. Similar coverage concerns exist across states where marketplace enrollment has grown significantly since 2021.

Emergency Rooms Become Default Care Option

The report confirms that people without health insurance or regular healthcare providers increasingly turn to emergency rooms for care. Emergency department utilization for non-urgent conditions strains hospital resources and drives up uncompensated care costs. Healthcare organizations can address these challenges through strategic financial planning and operational improvements. 

Plan for Continued Uncertainty

The combination of rising uncompensated care, inadequate reimbursements and potential coverage losses creates significant uncertainty for healthcare organizations. Hospitals operating with positive but narrow margins face particular vulnerability. Strategic planning must account for potential increases in charity care, enhanced collection procedures and operational efficiencies that protect financial health without compromising patient access.

O’Brien stated there is a lot of uncertainty in the healthcare market right now. Healthcare organizations need clear visibility into their financial performance and proactive strategies to address shifting payment dynamics. Strong financial management and accurate forecasting become essential tools for maintaining stability.

The James Moore healthcare team can help you interpret reimbursement trends and prepare your financial strategy. Contact us today.

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