Healthcare Roundup: Readmission Penalties, Enrollment Shifts, and Medicaid Changes

CMS will penalize 2,334 hospitals under the Hospital Readmissions Reduction Program for fiscal 2027, with most penalties below 1% and ten hospitals facing the maximum 3%. Health insurer membership fell 2.8% year over year to about 312.5 million in the first half of 2026, driven by declines in the individual market and Medicaid. KFF also examined exchange insurer entries and exits and the state-level Medicaid effects of the One Big Beautiful Bill Act.

CMS will penalize 2,334 hospitals in fiscal 2027, about 80% of those reviewed. Ten face the 3% maximum, 34 at 2% or more, and 244 at 1% or higher. Most—71.8%—fall below 1%; 578 avoid penalties, down from 641 in 2026. The review used Medicare Advantage and fee-for-service data from July 2023 to June 2025, but penalties apply only to traditional Medicare payments.

Insurer membership slipped 2.8% year over year to about 312.5 million in 2026's first half. Individual market enrollment fell 17.2%, Medicaid dropped 5.3% to 73 million, and employer group risk declined 4.3%. Medicare Advantage rose 2% to about 35.1 million. KFF tracked 15 exchange exits and five entrants across 15 states, plus OBBBA Medicaid effects.