Seth Cohen , 2025-05-08 13:44:00
Medicaid was meant to be the solution. Then came the Affordable Care Act. But while the uninsured rate in America has reached historic lows, the financial burden on patients continues to rise.
According to most recent estimates, 26 million Americans remain uninsured — half the number before the ACA — yet uninsured patients can account for nearly 40% of patient dollars owed to hospitals. Despite expanded coverage through Medicare, Medicaid, and the ACA, gaps persist, leaving millions either uninsured or underinsured. As a result, hospitals are seeing a growing share of revenue tied to patients who struggle to pay, leading to mounting unpaid bills that impact both individuals and healthcare providers.
For the healthcare industry, this crisis isn’t just about financial risk — it’s about consumer trust. When patients can’t afford care, they disengage, often convinced the system isn’t built for them. And when trust erodes, so do outcomes — because people who don’t trust the system are less likely to seek care at all. Surprise bills, opaque pricing, and unaffordable out-of-pocket costs send a clear message: “You’re on your own.”
We know from medicine that prevention is the best cure, as early intervention reduces costs and improves outcomes. Healthcare finance must adopt the same mindset. Instead of reacting to financial hardship after it happens, providers must embrace financial preventive care — investing in proactive engagement, intelligent navigation, and real-time financial matching to connect patients with the right resources before they fall into crisis.
So, who is on their own now, and why are there so many?
The Medicaid “unwinding” process stripped more than 25 million people of their coverage in just two years. While some have transitioned to marketplace plans with enhanced federal subsidies, many remain caught in a gap, forced to pay out of pocket for care they can’t afford. The financial strain isn’t just a burden on patients; it’s devastating for providers, who might recover less than ten cents on the dollar when services go unpaid.
And this is only the beginning. Medicaid funding is under scrutiny, with huge potential cuts, changes to expansion funding, and new work requirements all on the table – threatening coverage for the 79 million Americans who rely on the program. Enhanced federal subsidies for ACA marketplace plans, which have served as a financial lifeline, are set to expire at the end of 2025 unless Congress intervenes. If they disappear, premiums could surge by as much as 75%, forcing millions into the ranks of the uninsured. The Congressional Budget Office projects that an average of 3.8 million Americans could lose coverage each year between 2026 and 2034, leaving them one medical emergency away from financial catastrophe.
In the absence of federal intervention, hospitals are absorbing the burden of rising patient financial distress, and are now tasked with collecting more dollars from the patients least able to pay. But it’s also up to hospitals to change this dynamic, not only to protect their balance sheets but to restore patient confidence. One answer lies in redefining the financial experience not as a transactional process, but as an extension of patient advocacy. That means meeting patients where they are, guiding them to financial resources before they fall into crisis, and ensuring they aren’t left to navigate affordability challenges alone.
But solving this at scale requires more than just new policy or better communication — it demands patient-centered care and technology that can anticipate financial strain and intervene before it becomes a crisis.
AI-powered automation can offer hospitals a scalable preventive solution. Each year, billions of dollars in financial assistance go unused due to fragmented systems and a lack of awareness. For example, there is an estimated $138 billion sitting in HSA accounts and $3 billion is lost annually from unused FSA accounts. Another example: Despite pouring $5 billion each year into patient support programs, pharmaceutical manufacturers only get an estimated 3% of eligible patients to enroll and use their programs.
AI tools can proactively connect patients with these underutilized financial resources, such as automated Medicaid enrollment, pharmacy co-pay assistance, and HSA/FSA funds, removing barriers that often keep aid out of reach. By identifying at-risk patients early and guiding them to the right support before bills become unmanageable, hospitals can ease patients’ financial strain while also improving their bottom line.
The future of healthcare affordability won’t be shaped by policy alone, but, perhaps in spite of it. Hospitals and health systems can choose to lead today. Personalizing billing experiences for patients, automating pathways that connect them to funding resources, and identifying patients at the highest risk of payment default with upstream interventions would begin to counter the swelling crisis. Those providers who invest in financial navigation solutions won’t just protect their financial stability; they will redefine what it means to deliver patient-centered care.
Photo credit: mkurtbas, Getty Images
Seth Cohen is President of Cedar, the leading patient financial platform for healthcare providers, and is a member of its Board of Directors. Previously, Seth was CEO and Co-Founder of OODA Health, a healthcare technology company that was acquired by Cedar in June 2021. Prior to OODA Health, Seth was one of the earliest employees at Castlight Health and served on the leadership team. He was a member of Castlight’s Board of Directors until May 2022, when Castlight was acquired by CD&R and merged with Vera Whole Health. Before his time at Castlight, Seth was a management consultant at McKinsey & Company in the Healthcare Payor and Provider practice. Seth earned an MBA from Harvard Business School as a Baker Scholar and an MPA from Harvard Kennedy School. Seth completed his undergraduate studies at Stanford University as a Phi Beta Kappa. Outside of work, Seth loves spending time outdoors and performing impromptu musicals with his three young children.
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