Healthcare affordability has been a growing concern for years. As costs continue to shift to patients through rising premiums, coinsurance, and the widespread use of high-deductible health plans (HDHPs), more Americans are finding themselves underinsured and expected to pay thousands of dollars before their insurance kicks in.
The recently passed Big Beautiful Bill will accelerate the affordability crisis. The legislation includes $1 trillion in federal Medicaid spending cuts over the next decade, with an estimated 10 million people expected to lose coverage. Hospitals serving high volumes of Medicaid patients — especially in rural areas — will likely feel the greatest financial strain.
The bill also sets aside a $50 billion rural relief fund, but that support only makes a dent in the $137 billion in projected Medicaid funding losses for rural areas over ten years. For hospitals already operating with razor-thin or negative margins, these changes could have far-reaching consequences for staffing, service lines, and overall access to care.
The cuts outlined in the bill are being made at the federal level, but how they ultimately affect patients and providers will depend on how individual states respond. Some may work to shield hospitals and patients from the full impact. Others may not. Until state-level decisions become clearer, the full downstream effects remain uncertain.
Understanding the risk: Rural and high-Medicaid hospitals will feel it first
In rural communities, Medicaid is a lifeline. It covers 1 in 4 rural adults, nearly half of all births, and 4 in 10 children. Already, over 700 rural hospitals are at risk of closure, with 300 considered in immediate danger.
According to recent estimates, hospitals could lose up to $0.21 for every Medicaid dollar as the federal match declines. Independent rural hospitals could see up to 56% of their net income vanish — an especially harsh blow for those already on the brink.
These numbers don’t just represent lost revenue. They point to real human consequences:
- Staff layoffs and increased burnout
- Maternity ward closures
- Longer wait times for emergency care
- Entire communities losing access to essential health services
For hospital leaders, preparing for these downstream effects requires clear strategy, urgent planning, and a commitment to protect both patients and the people who care for them.
Three strategies to strengthen financial stability and protect access
1. Expand financial navigation and aid screening capabilities
As coverage declines, more patients will arrive at hospitals without insurance or a clear understanding of their financial obligations. Pre-service financial screening will be essential, not only to determine whether patients qualify for charity care or financial assistance, but also to ensure they have a clear picture of what their care will cost.
This is not work that can be deprioritized. Financial counselors will become even more essential, serving as frontline guides for patients navigating care in a coverage gap.
Yet with more than two million healthcare jobs at risk due to Medicaid-related revenue losses (AHA), some hospitals may be forced to make tough staffing choices. Preserving financial counseling resources should be a priority.
To support these efforts, hospitals are increasingly turning to digital tools that streamline financial aid screening, making the process faster, more accurate, and easier to manage across teams. AI-powered platforms can analyze patient data in real time to identify assistance eligibility, personalize payment options, and automate outreach, lightening the administrative load while ensuring no patient falls through the cracks. And when patients don’t qualify for full assistance but still need support, interest-free, pre-service financing can help. These approaches empower patients to commit to care before it’s delayed or deferred, creating a smoother experience for both the patient and provider.
2. Offer longer repayment terms where it makes sense
Not every patient will be able to afford their medical bills, especially those who lose Medicaid coverage and are already living on tight financial margins. But among this population, there is a small subset of patients who may be able to pay a portion of their bill if given enough time to do so.
Unfortunately, most hospital payment structures don’t make that possible. Today, 65% of hospitals cap repayment plans at 24 months or less — even though the average patient can afford only about $97 per month, which covers a bill of less than $2,400. That leaves little flexibility for patients facing even modest out-of-pocket costs.
Longer-term, interest-free payment plans can give patients a realistic path to resolution while improving repayment rates and reducing bad debt for providers. It’s not a fit for everyone or every bill size, but for patients who fall just outside the margins of assistance, time could be the factor that keeps them connected to care.
3. Improve liquidity without reducing access
As Medicaid revenue declines, hospital leaders are facing growing pressure to protect Days Cash on Hand while continuing to meet the needs of their communities. In-house payment plans remain an important tool for patient affordability, but they can tie up significant cash, come with high default rates, and require ongoing operational resources to manage.
To ease this strain, many hospitals are looking for ways to strengthen liquidity without making difficult trade-offs that limit access to care. One approach is to transfer existing hospital payment plans to a partner in exchange for immediate cash and A/R reduction. This preserves patient-friendly, interest-free terms while improving Days Cash on Hand and reducing risk of default.
But that’s not the only path forward. Hospitals are increasingly turning to a broader mix of liquidity strategies, including denial management programs that secure reimbursement from payers, and prompt pay discount programs that encourage faster collections from patients with the ability to pay. These strategies, when combined with payment plan optimization, can relieve cash flow constraints without compromising patient access.
While these strategies won’t solve the affordability crisis on their own, they represent practical innovations that chip away at a much larger, systemic problem. In the face of structural and legislative challenges, we might find progress in small steps and each step toward financial clarity, patient support, and operational resilience matters.
Moving forward with strategy
The Big Beautiful Bill’s Medicaid eligibility cuts represent one of the most significant policy shifts in healthcare affordability in recent history. For health systems, the question now is how to get ahead before the effects are fully felt in patient volumes, reimbursement, and revenue. The time to act and implement new solutions is now.
Medicaid cuts won’t just impact rural hospital balance sheets. They will impact real people — patients who may lose access to care, hospital staff facing burnout or job loss, and communities already struggling with limited resources. Rural hospitals could be forced to scale back services or close altogether, putting critical care out of reach for families who can’t afford to travel. The ripple effects will be felt in emergency rooms, maternity wards, and community health clinics across the country.
For healthcare leaders, this moment calls for a clear strategy, bold planning, and a commitment to preserving access for the most vulnerable populations. Hospitals must explore every lever available, from enhancing financial navigation and supporting frontline teams to rethinking payment models and bolstering liquidity strategies, in order to build resilience before the full impact is felt.
Fortunately, hospitals do not have to face this alone. A growing ecosystem of innovative, technology-driven companies is working to address different aspects of the affordability crisis. At every step of the revenue cycle, these solutions are helping providers take meaningful steps toward sustainability.
The stakes are high, and the choices made today will determine both the financial health of hospitals and the continued access to essential care for entire communities. The time to act is now.
Photo: Jorg Greuel, Getty Images
Itzik Cohen is the Co-Founder and Chief Executive Officer of PayZen, the leading AI-driven patient affordability platform transforming how patients access and pay for care. A 3x founding entrepreneur and former professional basketball player, Itzik has dedicated his career to building technology that helps millions overcome financial challenges.
A nationally recognized voice in healthcare fintech, revenue cycle innovation, and patient affordability, he brings deep expertise from executive roles at Beyond Finance, Prosper Marketplace, and the early team at WebEx. At PayZen, he partners closely with health system leaders to reduce bad debt, boost collections, and expand access through individualized, AI-powered payment solutions. His work is grounded in proprietary industry research, including State of Healthcare Affordability Report: The Patient Perspective 2025 and State of Healthcare Affordability Report: The Provider Perspective 2025.
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