This August, between summer weekends and back-to-school prep, we dug into fresh health policy research. This month we read about health insurance tax credits, financial health in private equity owned hospitals, and recent trends in patient repayment of hospital bills.
Health Insurance Tax Credits: Their Unexpected Effectiveness, and Policies to Support Them
Jeanne M. Lambrew and Aviva Aron-Dine. Commonwealth Fund. August 2025. Available here.
Researchers for the Commonwealth Fund reviewed congressional and administrative reports, data, proposals, rules, and laws dating back to 2010 to trace the purpose, evolution, and impact of health insurance tax credits.
What it Finds
- The Affordable Care Act (ACA) originally projected 24 million Marketplace enrollees by 2019, but sign-ups peaked at about half that before declining under the first Trump administration. Enrollment surged after enhanced tax credits were introduced in 2021, reaching 24.2 million by 2025, with more than 90 percent of enrollees receiving subsidies. While outreach and longer enrollment periods helped, the increased financial assistance was the biggest driver, pushing enrollment above the Congressional Budget Office’s original projections.
- Coverage gains also varied by state policy. States that expanded Medicaid, ran their own Marketplaces, and adopted individual responsibility provisions achieved coverage rates about six percentage points higher than states that did none of these. At the same time, the five states with the largest enrollment gains from 2020 to 2024 were all non-Medicaid expansion states, where many uninsured residents qualified for zero-premium plans under the American Rescue Plan Act (ARPA).
- Health insurance coverage growth has been strongest among people with incomes below 150 percent of the federal poverty level (FPL). Combined with recent data, this suggests that zero-premium plans and improved enrollment procedures have made the Marketplace a reliable coverage option for people at or near the poverty line.
Why it Matters
Premium tax credits have been central to expanding coverage in the United States. This analysis shows they could drive even greater progress toward near-universal coverage if paired with Medicaid expansion, streamlined enrollment systems, and supportive state policies. But recent changes threaten that progress. H.R. 1, the budget reconciliation bill, narrowed eligibility and increased the paperwork required to qualify for tax credits, and Congress may allow enhanced subsidies to lapse. Proposals to shift dollars from coverage to savings accounts could further erode gains. While these steps might offer short-term budget savings, they would likely increase federal spending on uncompensated care and worsen health outcomes as the uninsured rate grows.
Financial Health After Private Equity Hospitals Are Sold
Sneha Kannan and Zirui Song. JAMA Health Forum. August 2025. Available here.
Using Medicare Cost Report data from 2006 to 2022, research published in JAMA compared 18 private equity (PE) hospitals sold to another PE firm with 18 PE hospitals sold to non-PE for-profit firms. The study goal was to assess how hospital finances changed after resale, while also considering the context of the initial PE acquisitions.
What it Finds
- Hospitals resold to a second PE owner saw their operating margins decline by 8.4 percentage points compared to hospitals sold to non-PE, for-profit firms. This was driven by higher costs; expenses rose an average of $316 per available bed-day. By contrast, initial PE acquisitions were not linked to higher expenses.
- When HCA hospitals were excluded (where initial PE owners remained the largest shareholders), initial PE acquisitions were instead associated with lower costs—about $586 less per inpatient bed-day.
Why it Matters
As sales of PE-owned hospitals become more common, their effects on patients and communities warrant close attention. This study shows that, on average, hospitals acquired by a second PE owner were managed differently than those sold to non-PE for-profit firms. Rather than pursuing additional cost cutting after reductions made by the initial PE owner, secondary PE owners often reversed some of those cuts by increasing spending—such as on labor and supplies, capital investments, or administrative costs. While greater investment in staffing could benefit patient outcomes, higher spending on leases or administrative functions may offer little direct value.
Patient Repayment of US Hospital Bills From 2018 to 2024
Benedic Ippolito et al. JAMA Health Forum. August 2025. Available here.
Research published in JAMA examined how payment of patient cost sharing for hospital services has shifted in recent years and how it varies across sources of coverage, hospitals, and services. This cross-sectional study analyzed billing data from 217 US hospitals between 2018 and 2024, covering 24.5 million privately insured and 6.2 million Medicare Advantage (MA) episodes with out-of-pocket costs.
What it Finds
- In general, patients with private coverage have more unpaid medical bills than those in MA. Average patient liability per episode, including those with no liability, was higher for private insurance than MA ($375.41 vs $172.50). Thanks to deductibles, among the privately insured, liability was about 49% higher in January than in December.
- Repayment rates have declined in recent years. Before the COVID-19 pandemic, patients repaid about 54% of their liability in both groups. By 2023, repayment rates had fallen 14.3% for the privately insured and 16.8% for MA enrollees compared to 2018-2020 rates.
- Rates also varied by patient age, bill size, and care setting. Among the privately insured, adults aged 20–29 had the lowest repayment rates. For all patients, larger bills were less likely to be repaid: repayment for bills over $1,000 was usually below 35 percent, compared with about 50 percent for $100 bills. MA enrollees showed the same pattern, with even lower repayment rates for large bills. At the other end of the spectrum, very small balances were also less likely to be repaid: bills under $50 (private) or under $100 (MA) had lower repayment than mid-range balances. Repayment rates were also higher for outpatient than inpatient care, reflecting the smaller bills typical of outpatient episodes.
Why it Matters
The analysis finds that patient repayment of cost sharing has declined in recent years, possibly reflecting rising prices as well as changes in medical debt reporting. Repayment rates were unexpectedly lower for the smallest bills, which the authors suggest may stem from limited collection efforts or reduced consumer attentiveness. A sharp rise in patient liability each January highlights the impact of deductible resets, though repayment rates did not differ by liability level—implying hospitals recoup less for early-year visits. While unpaid liability poses clear costs to providers, the impact on patients is less certain. If repayment declines continue, hospitals and physicians may increasingly require upfront payment when allowed.
