Nearly half of Indiana's hospitals are operating at a loss. They say they need help

The Indiana Hospital Association released a new report on Tuesday, warning that many of the state’s hospitals are financially vulnerable.

According to Kaufman Hall, the health care consulting firm behind the report, 45% of Indiana Hospitals are operating at a loss. That’s compared to 37% of hospitals operating at a loss nationally. 

The analysis pointed to increased labor costs and private insurer issues, but the main driver of expected loss is reduced reimbursement rates from Medicaid. 

The passage of the “One Big Beautiful Bill” is expected to result in insurance coverage losses that lead to a $13 billion cut to Indiana Hospitals over the next decade. 

Those coverage losses will largely be the result of individuals losing Medicaid because of things like work requirements, but continuing to need care. Hospitals will still have to pick up the tab for uninsured patient care.

Hospital officials say they want to see Indiana increase Medicaid reimbursement rates to help offset expected cuts.

Brenda Reetz is the CEO of the Green County General Hospital in Linton, in rural southeast Indiana. The hospital had to close its obstetrics unit this month because of poor reimbursements. 

“We’re going to continue to see more and more cuts like this across the state if something isn’t done,” she said.

Reetz also said hospitals have been impacted by delays and coverage denials from commercial insurers like Anthem, something that has also affected their bottom lines.

“For two years, we've experienced underpayments by our two largest commercial payers,” she said. “We continue to see millions of dollars being withheld by them and underpayments.”

Anthem did not immediately respond to our request for comment. 

The “One Big Beautiful Bill” also included a $50-billion allotment for rural healthcare intended to offset some of the cuts to Medicaid, but Reetz said it won’t be enough to keep hospitals like hers afloat. 

“While this Rural Health Transformation fund seems like it's going to be this great, big, beautiful band-aid to help rural health care survive the Medicaid cuts that we're seeing, it's not going to happen,” she said. 

The Indiana Hospital Association also underlined that reimbursements for Medicaid were already too low, with the state paying 57 cents for every dollar of care. That may dip even lower when parts of the “One Big Beautiful Bill” start taking effect after 2030. 

According to the President of the Indiana Hospital Association, Scott Tittle, Indiana’s already has some of the lowest Medicaid reimbursement levels in the country.

“There’s a persistent narrative at the statehouse and nationally that hospitals are doing just fine,” he said. “What this report demonstrates is the exact opposite.” 

Tittle called for state and federal lawmakers to work with them to address hospitals' financial stability. 

Contact Government and Health Reporter Benjamin Thorp at bthorp@wfyi.org