Advisory
Fact Sheet: Medicare and Medicaid Constitute Majority of Hospital Payments
As of March 16, 2026.
It is broadly acknowledged that Medicare and Medicaid, which are set by the government, reimburse hospitals at rates below the cost of providing care. The Medicare Payment Advisory Commission (MedPAC) has found that hospitals experienced a -12% margin on fee-for-service (FFS) Medicare services in 2024 and projected that margin will remain deeply negative at -10% in 2026.1 This financial pressure is exacerbated by the fact that Medicare and Medicaid paid for at least half of the inpatient days at 96% of hospitals, and at least two-thirds of inpatient days at 80% of hospitals. In fact, while Medicare and Medicaid pay for over 70% of hospital inpatient days, they account for less than half of hospital revenue.2 Because these payments are fixed, hospitals cannot fully absorb the tremendous inflationary cost pressures they currently face.
A recent AHA report highlights the significant growth in expenses across labor, drugs and supplies, as well as the impact that rising inflation is having on hospital prices. Further cutting Medicare payments to hospitals and health systems will threaten access to care for patients and communities.
| Inpatient Days | ||||
|---|---|---|---|---|
| State | 50% or greater | 67% or greater | 75% or greater | 90% or greater |
| US Total | 96% | 80% | 50% | 5% |
| AK | 100% | 100% | 53% | 11% |
| AL | 97% | 85% | 38% | 1% |
| AR | 99% | 87% | 60% | 7% |
| AZ | 99% | 84% | 52% | 1% |
| CA | 99% | 81% | 53% | 6% |
| CO | 97% | 75% | 34% | 4% |
| CT | 100% | 97% | 74% | 0% |
| DC | 88% | 50% | 38% | 13% |
| DE | 100% | 100% | 82% | 9% |
| FL | 99% | 67% | 28% | 1% |
| GA | 94% | 69% | 34% | 4% |
| HI | 95% | 73% | 41% | 0% |
| IA | 91% | 81% | 68% | 10% |
| ID | 100% | 87% | 32% | 2% |
| IL | 98% | 92% | 64% | 8% |
| IN | 99% | 91% | 58% | 2% |
| KS | 89% | 65% | 35% | 10% |
| KY | 100% | 96% | 72% | 3% |
| LA | 100% | 83% | 49% | 3% |
| MA | 96% | 81% | 56% | 1% |
| MD | 100% | 91% | 51% | 0% |
| ME | 97% | 88% | 73% | 3% |
| MI | 99% | 91% | 66% | 7% |
| MN | 98% | 91% | 54% | 2% |
| MO | 96% | 83% | 64% | 12% |
| MS | 77% | 64% | 39% | 5% |
| MT | 97% | 69% | 49% | 10% |
| NC | 100% | 91% | 60% | 2% |
| ND | 100% | 98% | 61% | 2% |
| NE | 95% | 82% | 36% | 1% |
| NH | 100% | 86% | 57% | 0% |
| NJ | 100% | 81% | 49% | 0% |
| NM | 100% | 95% | 61% | 2% |
| NV | 98% | 84% | 44% | 4% |
| NY | 99% | 97% | 70% | 6% |
| OH | 99% | 92% | 57% | 4% |
| OK | 97% | 76% | 42% | 3% |
| OR | 97% | 87% | 78% | 5% |
| PA | 98% | 87% | 66% | 2% |
| RI | 100% | 100% | 64% | 0% |
| SC | 94% | 79% | 51% | 6% |
| SD | 98% | 79% | 52% | 5% |
| TN | 98% | 87% | 49% | 4% |
| TX | 85% | 51% | 28% | 6% |
| UT | 86% | 57% | 29% | 0% |
| VA | 100% | 90% | 59% | 1% |
| VT | 100% | 93% | 71% | 7% |
| WA | 98% | 93% | 51% | 1% |
| WI | 94% | 73% | 51% | 11% |
| WV | 98% | 93% | 65% | 11% |
| WY | 100% | 83% | 41% | 0% |
- medpac.gov/wp-content/uploads/2025/12/Tab-D-Hospital-Dec-2025.pdf
- AHA analysis of 2024 AHA Annual Survey data