Midterm election outcomes could reshape healthcare reimbursement and funding models.
Key takeaways
Medicaid policy changes may increase financial pressure on hospitals and health systems.
Healthcare leaders should build flexibility as payment and coverage rules evolve.
With the 2026 U.S. midterm elections approaching, RSM is looking at the economic stakes and the key issues for various industries. This article is one part of that series.
The outcome of the 2026 U.S. midterm elections will help shape the policy landscape facing U.S. businesses through the remainder of the decade. Changes in congressional control, oversight priorities and state-level policymaking could influence everything from taxes and funding programs to regulation, workforce issues and investment decisions.
Here’s a look at the implications for healthcare.
The top issue for healthcare
The central issue for healthcare continues to be reimbursement pressure. Medicaid financing changes, the expiration of enhanced Affordable Care Act (ACA) premium tax credits, site-neutral payment expansion and growing scrutiny of supplemental payment programs are reshaping hospital revenue. In the near term, hospitals and health systems face greater coverage churn, uncompensated care and administrative complexity as new Medicaid eligibility requirements are implemented. Rural, safety-net and other providers with significant government-payer exposure are most at risk. Over time, lower provider-tax thresholds, reductions in state-directed payments and continued efforts to narrow payment differences across care settings could further constrain reimbursement.
The strategic challenge for many organizations will be maintaining access and financial stability while adapting to a less predictable and potentially less favorable payment environment. For middle market hospitals and health systems, that could affect staffing decisions, capital investment plans, service-line expansion and the ability to fund long-term transformation initiatives.
Implications for future legislation
Reimbursement will remain the key pressure point for hospitals and health systems. Under continued Republican control, implementation of Medicaid eligibility requirements, provider-tax reductions and state-directed payment limits is likely to remain on track, while affordability, price transparency and site-neutral payment policies could attract additional scrutiny.
If the election outcome is a divided government, this could shift the focus from major legislative changes to oversight, rulemaking and must-pass legislation. Provider-tax relief and other hospital payment compromises could become more viable, while Centers for Medicare & Medicaid Services (CMS) would retain broad authority to advance site-neutral payment reforms and other reimbursement changes through annual rulemaking. Medicare Advantage, hospital payments and health care affordability could also emerge as focal points in debt-ceiling and funding negotiations.
State decisions may ultimately prove most consequential, as Medicaid financing strategies and state-directed payment programs determine how much federal funding pressure providers can offset. The key question for healthcare leaders is whether policymakers moderate these reimbursement headwinds or allow them to intensify as larger Medicaid financing reductions begin phasing in after 2027.
Other top issues for the healthcare industry
Patient affordability and access to coverage will remain one of the industry's most significant policy pressures. The expiration of enhanced ACA premium tax credits has increased costs for marketplace consumers, intensified concerns about coverage losses and renewed debate over extending federal premium assistance. At the same time, Congress continues to focus on healthcare costs through drug-pricing initiatives, pharmacy benefit manager (PBM) reform, price-transparency legislation and potential changes to surprise billing rules, reflecting growing bipartisan interest in transparency and accountability as tools to address affordability.
The nomination hearing of Ge Bai as U.S. Department of Health and Human Services (HHS) Assistant Secretary reinforces that direction. A longtime researcher of hospital pricing, nonprofit hospital accountability and health care transparency, Bai provides the administration a significant regulatory platform to advance affordability initiatives through HHS and CMS. Hospitals could face increased scrutiny of pricing practices, site-neutral payment differentials, medical-loss-ratio transparency, and the relationship between tax-exempt status and community benefit, even absent new legislation.
States are also likely to remain active participants in the affordability debate through coverage initiatives, transparency requirements and oversight of provider and insurer practices. For hospitals and health systems, affordability is increasingly evolving from a political issue into a policy framework that could influence reimbursement, regulation and compliance expectations for years to come.
By the numbers
CMS projects U.S. health care spending to increase from $5.3 trillion in 2024 to approximately $9 trillion by 2034, with spending growth outpacing gross domestic product and healthcare's share of the economy rising from 18% to 20.6%. The federal government's share of national health expenditures is projected to increase from 31% to 33% over the same period, driven primarily by Medicare growth, underscoring why affordability and healthcare spending remain central concerns for Congress and policymakers.
What middle market businesses should consider now
- Hospitals and health systems should evaluate the impact of Medicaid enrollment losses, provider-tax changes, state-directed payment reductions and site-neutral payment policies on revenue, payer mix and operating margins. Stress-testing liquidity, uncompensated care and capital plans under multiple state and federal scenarios can help identify vulnerabilities before policy changes take effect.
- Organizations should engage early with state agencies and hospital associations where Medicaid financing, supplemental payment programs and Rural Health Transformation Program funding may influence reimbursement.
- Tax-exempt hospitals should also review financial assistance, community benefit and Form 990 Schedule H reporting to ensure public commitments align with operational practices.
The goal for organizations is not to predict election outcomes, but to build the operational flexibility needed to respond quickly as reimbursement, coverage and regulatory policies evolve.
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