Indiana Hospital Association warns of $1 billion in annual losses for hospitals

INDIANAPOLIS (WISH) — Indiana hospitals are facing mounting pressure as Medicaid shortfalls and rising costs threaten access to care, according to a release issued Tuesday from Indiana Hospital Association.

The nonprofit trade association represents over 170 Indiana hospitals and health systems as a voice for them before state and federal policymakers. 

The associated called on state and federal lawmakers to address systemic challenges facing hospitals by modernizing Medicaid reimbursement rates, reducing administrative burdens, ensuring hospitals can provide essential services, particularly in rural areas, and supporting financial stability to prevent hospital closures.

A report from the association says that Indiana hospitals continue to operate on razor-thin margins — with a median operating margin of just 1.9% in 2025 through August, below the national median of 2.6% during that time. Meanwhile, operating income among Indiana hospitals fell 5.5% year-over-year, representing nearly $50 million in diminished resources available to support patient care. Further modeling shows a high probability of $1 billion in annual losses for Indiana hospitals over the next three to five years.

Indiana’s rural hospitals remain among the most financially vulnerable. Earlier this year, Greene County General Hospital in Linton was forced to shut down its obstetrics department due to chronically inad...