Hospitals Serving Military Face Financial Risks from Trump-Era Cuts

Hundreds of thousands of service members and families may rely on vulnerable hospitals due to Medicaid cuts in 2017 legislation.

Published on Mar. 11, 2026

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A new analysis found that as many as 724,000 service members, their families, and veterans may rely on health care at hospitals facing financial distress, partly due to cuts in Medicaid funding from President Trump's 2017 healthcare legislation. The researchers found that many hospitals, including both rural and urban facilities, are at risk of financial instability due to their heavy reliance on Medicaid reimbursements, which were reduced under the new law.

Why it matters

This issue is concerning because military members and their families often rely on civilian hospitals for care, especially in areas without military treatment facilities. If these hospitals become financially unstable, it could negatively impact the healthcare services available to the military community.

The details

The analysis, conducted by researchers at Harvard's T.H. Chan School of Public Health, looked at how many TRICARE beneficiaries (the military health insurance program) may be reliant on hospitals considered at risk of financial distress due to the Medicaid cuts in the 2017 healthcare legislation. The researchers used three criteria to identify at-risk hospitals: those with more than 25% Medicaid patients, safety net or critical access hospitals, and those with poor financial health based on the Altman Z-score. About 4% of hospitals met all three criteria, putting them at higher risk, while 19% met two of the criteria, putting them at moderate risk.

  • The 2017 healthcare legislation known as HR.1 was signed into law last summer and included sweeping changes to Medicaid that impacted hospitals.
  • The analysis was conducted and first viewed by ABC News in 2026.

The players

Dr. Jose Figueroa

Co-author of the analysis and associate professor of Health Policy and Management at Harvard's T.H. Chan School of Public Health.

TRICARE

The U.S. Department of Defense's health care program for active duty service members, National Guard and reserve members, military retirees, and their families.

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What they’re saying

“We wanted to get a sense of how many hospitals are potentially at risk for becoming potentially financially unstable with the upcoming looming HR.1 Medicaid cuts. There's a big focus on rural hospitals, but it is not just rural hospitals at risk, that we were finding that across the country, many urban hospitals are at risk.”

— Dr. Jose Figueroa, Co-author of the analysis and associate professor of Health Policy and Management at Harvard's T.H. Chan School of Public Health (ABC News)

“Military active duty service members on TRICARE and their families also on TRICARE are increasingly relying on civilian hospitals for their care, even when they're living within a military base. If we're finding evidence that there are many hospitals across the country that are at risk, to what extent will that affect military personnel and their families?”

— Dr. Jose Figueroa, Co-author of the analysis and associate professor of Health Policy and Management at Harvard's T.H. Chan School of Public Health (ABC News)

What’s next

The researchers say they plan to continue monitoring the financial health of hospitals that serve the military community to assess the ongoing impact of the 2017 healthcare legislation.

The takeaway

This analysis highlights the potential unintended consequences of healthcare policy changes, as cuts to Medicaid funding could jeopardize access to care for vulnerable populations, including military service members and their families who rely on civilian hospitals for their healthcare needs.