Healthcare bankruptcies fall in 2025, but providers still face headwinds: report

Core Insights - Healthcare bankruptcies declined for the second consecutive year, with 45 Chapter 11 filings in 2025, a 21% decrease from 2024 and a significant drop from 79 cases in 2023 [4][7] - Despite the decline in overall bankruptcies, hospital bankruptcies increased by 60%, rising from five filings in 2024 to eight in 2025 [4][7] - The majority of bankruptcies in 2025 originated from middle-market firms, which have liabilities between $10 million and $100 million [3] Industry Challenges - The healthcare sector is facing significant financial pressures due to policy changes that may increase the uninsured population, particularly following a tax and policy bill signed into law that includes nearly $1 trillion in cuts to Medicaid [5] - The expiration of enhanced financial assistance for Affordable Care Act coverage at the end of 2025 has led to rising premiums, likely resulting in more individuals dropping their insurance [6] - Experts warn that impending funding cuts will have real impacts starting in 2026, urging healthcare providers to proactively plan and allocate resources to avoid reactive decision-making [7]