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Residents of Baxter County could face healthcare changes in 2026 as federal insurance subsidies expire, the region’s largest hospital navigates funding threats, and sweeping Medicaid cuts take effect.
For the roughly 166,000 Arkansans who purchase health insurance through the Affordable Care Act marketplace, the most immediate impact arrives January 1. Enhanced premium tax credits that have kept coverage affordable since 2021 are set to expire unless Congress acts before the year’s end. As of this week, lawmakers remain deeply divided on a solution, with pessimism growing that any deal can pass both chambers before the deadline.
The Arkansas Insurance Department has already approved a 22.2% average rate increase for individual health plans in 2026, the largest single-year hike on record in the state. But for many Baxter County residents, particularly those between 50 and 64 years old who aren’t yet eligible for Medicare, the true cost could be far steeper.
The Congressional Budget Office estimates that roughly 4 million Americans would lose health insurance coverage next year if the enhanced subsidies expire.
Older adults face steepest dollar increases
The demographics of those facing the largest premium increases read like a profile of Baxter County itself: older adults approaching retirement, self-employed workers, small business owners, and farmers. These groups have historically relied on the ACA marketplace because they lack employer-sponsored coverage.
About half of all marketplace enrollees who would lose subsidies entirely are between ages 50 and 64, according to federal data. In Baxter County, where more than 27% of residents are 65 or older, thousands of near-retirees could face difficult choices.
The numbers tell the story: A 64-year-old with income just above the subsidy cutoff, roughly $62,700 for an individual, could see annual premiums jump by more than $11,000. For a couple in their early 60s earning $90,000, monthly premiums could spike from $638 to nearly $2,915.
Under the ACA, insurers can charge people in their 50s and 60s premiums up to three times higher than they charge younger adults for the same plan in the same area, making the dollar impact of losing subsidies particularly severe for older enrollees.
Younger adults hit hardest by percentage increases
While older adults face the steepest dollar increases, analysis from the actuarial firm Oliver Wyman found that young adults ages 18 to 34 would be hit with the largest percentage increases in their premiums. The firm projects roughly 2.8 million young adults would leave the individual ACA market if the enhanced subsidies expire.
The Center for American Progress calculated that a single 28-year-old earning around $39,000 per year would see benchmark silver plan costs nearly double, from $1,565 to $2,868 annually. In some states, bronze plan costs for young adults at that income level would rise by more than 500%.
Lower-income young adults would be particularly affected. More than half of enrollees projected to leave the marketplace have household incomes between 100% and 200% of the federal poverty level, according to Oliver Wyman’s analysis. Many in this group currently pay nothing or close to nothing for coverage under the enhanced subsidies.
Gig workers, freelancers, and those in jobs that don’t offer health benefits would also feel the impact. The Treasury Department estimated that over 2.7 million self-employed workers and small business owners claimed premium tax credits in 2022.
“The people who will be impacted include part-time workers, gig workers, small business owners, self-employed people, and people who work in industries that don’t usually provide health benefits,” according to the Center on Budget and Policy Priorities.
Internal documents from the Arkansas Insurance Department, obtained through a freedom of information request by the Arkansas Times, reveal that state regulators have been bracing for significant enrollment losses. More than half of the Arkansans currently enrolled in marketplace plans could drop coverage in 2026 if subsidies expire.
Baxter Health navigates challenges from a position of strength
For Baxter Health, the region’s nonprofit hospital system serving 11 counties across north-central Arkansas and south-central Missouri, the policy changes arrive as the organization operates from a position of stability built over nearly two decades of growth.
“At Baxter Health, our admissions actually are increasing,” President and CEO Ron Peterson told attendees at the Mountain Home Area Chamber of Commerce’s State of Healthcare event in February. The hospital has recovered and surpassed pre-COVID patient levels, with total surgeries hitting an all-time record last year.
The health system now operates 45 locations across 12 counties, serving approximately 230,000 people. Its economic footprint is substantial, with an annual payroll exceeding $131 million and daily operating costs of $841,000. In November, Peterson received the A. Allen Weintraub Memorial Award, the Arkansas Hospital Association’s highest honor, recognizing his 18 years of leadership.
“Baxter Health has faced challenges before, and each time we have come through stronger because of the incredible people who work here,” Peterson wrote in a message to employees in August. “I have full confidence in our ability to navigate this season together.”
But Peterson has been candid about the financial pressures facing rural hospitals. Arkansas hospitals receive the lowest Medicare reimbursements nationwide, he noted at the February event, and government programs account for 83% of Baxter Health’s patients.
“We’re 63% Medicare, so 63% of our reimbursement, even though 100% of our costs went up, and our costs actually went up 20-some percent,” Peterson said.
A case study published by the American Hospital Association highlighted how the hospital’s $4.8 million operating loss last year would have been significantly worse without $4 million in savings from the federal 340B drug pricing program, which provides discounted medications to safety-net hospitals.
That program is now under threat. The federal government’s new 340B Rebate Model Pilot Program is set to take effect January 1, 2026, changing how rural hospitals access discounted medications. The American Hospital Association and several safety-net hospitals filed a federal lawsuit on December 1 seeking to block the changes.
Peterson has pushed back against speculation about the hospital’s future. “No member of leadership or any board member has had any conversations about selling Baxter Health,” he wrote in August. “In fact, it is the opposite, as we remain committed to being an independent, not-for-profit health system.”
Medicaid cuts add to concerns
The federal budget reconciliation law signed in July will reduce Medicaid spending by an estimated $911 billion over ten years nationwide. The Congressional Budget Office projects the cuts will result in 10 million more uninsured Americans by 2034.
To offset some of these cuts, Congress created a $50 billion Rural Health Transformation Fund to be distributed over five years starting in fiscal year 2026. Governor Sarah Huckabee Sanders announced in October that Arkansas would seek nearly $1 billion from the fund, with more than 300 proposals submitted by hospitals, nursing homes, and EMS providers across the state.
But the fund covers only about a third of the estimated cuts to federal Medicaid spending in rural areas. The rural health fund is also temporary, lasting only five years, while the Medicaid cuts are permanent.
Bo Ryall, president and CEO of the Arkansas Hospital Association, issued a warning about the state’s hospital finances: “Analysis from the most recent Medicare Cost Reports data shows that over 40% of Arkansas hospitals and more than 70% of rural hospitals operate at a loss in our state. When hospitals are not adequately reimbursed for providing care, they are forced to reduce services and staff.”
Hospitals brace for uncompensated care
Healthcare economists warn that as more people lose coverage or drop insurance due to unaffordable premiums, hospitals will face a surge in uncompensated care, meaning services provided to patients who cannot pay.
Research from the Urban Institute and Robert Wood Johnson Foundation estimates that if enhanced ACA tax credits expire, hospitals, physicians, and other healthcare providers would face more than $32.1 billion in lost revenue in 2026 nationwide, including a $6.3 billion increase in uncompensated care.
Congress remains divided as Trump seeks alternative
With the December 15 deadline looming for coverage starting January 1, Congressional action remains uncertain. The Senate is scheduled to vote on the subsidies next week as part of a deal to end the recent government shutdown, but no one knows what will be in the bill.
President Trump has acknowledged that extending the subsidies “may be necessary” to prevent premium spikes, telling reporters aboard Air Force One last week that his administration is “looking at different alternatives.” At a Cabinet meeting Tuesday, Trump said “something’s going to happen,” though he acknowledged “it’s probably not going to be easy.”
Trump has been critical of the current subsidy structure, arguing that money should go directly to consumers rather than insurance companies. “I am recommending to Senate Republicans that the Hundreds of Billions of Dollars currently being sent to money sucking Insurance Companies in order to save the bad Healthcare provided by ObamaCare, BE SENT DIRECTLY TO THE PEOPLE SO THAT THEY CAN PURCHASE THEIR OWN, MUCH BETTER, HEALTHCARE, and have money left over,” he wrote on Truth Social.
The White House initially expected to roll out a plan last week pairing an extension with conservative reforms, but that was scrapped following sharp backlash from Republican lawmakers who were blindsided by the framework.
Senate Majority Leader John Thune acknowledged the lack of progress Monday. “My assumption is that by next week when we have to have that vote, that we might not be far enough along on the bipartisan discussions,” he told reporters. He said “conversations are still active on a solution,” but warned “there are some significant sticking points.”
The GOP is divided between a solid group of lawmakers who don’t want to see the enhanced subsidies expire and others who view the ACA as irretrievably broken. House Speaker Mike Johnson called the subsidies a “boondoggle” during the recent shutdown fight.
Some moderate Republicans are pushing for action. “I encouraged the president to continue on this path of trying to move forward with a temporary extension,” said GOP Rep. Nicole Malliotakis of New York. “We have to do our best to protect American people and consumers.”
Democrats have pushed for a clean extension of the subsidies. “We insist that the ACA tax credits have to be renewed and extended, period,” Senate Democratic Leader Chuck Schumer told reporters.
The political calculus is complicated by geography: More than half of ACA marketplace enrollees live in districts represented by Republicans, and states like Texas, Florida, Georgia, and Arkansas have seen the largest enrollment growth under the enhanced subsidies.
Congress is slated to leave Washington on December 19, giving lawmakers just 13 legislative days to reach a deal.
What residents can do
For Baxter County residents navigating open enrollment, healthcare experts offer cautious advice: Select a plan by the December 15 deadline for January 1 coverage, but be prepared to revisit that decision if Congress acts.
If Congress does eventually extend the tax credits, there will be an opportunity for people who have already selected plans to go back and choose a new plan. In most states, open enrollment doesn’t end until January 15, and if Congress makes changes, that deadline could be extended.
Residents can explore coverage options at healthcare.gov or through the Arkansas Health Insurance Marketplace. Local assistance is available through the My Arkansas Helpline at 1-844-355-3262.
For those with incomes below 138% of the federal poverty level, Arkansas’s Medicaid expansion program (ARHOME) may provide coverage with minimal out-of-pocket costs.
Community health resources in Baxter County include Boston Mountain Rural Health Center, which offers services on a sliding fee scale regardless of insurance status, and ARcare, which provides care to patients regardless of their ability to pay.
For many in the Twin Lakes region, the coming months will require careful decisions, balancing the cost of coverage against the risk of going without.
