The Trump administration’s preliminary 2026 budget proposal for the Department of Health and Human Services (HHS) signals sweeping changes. With a one-third cut to discretionary spending, including a 40% reduction to the NIH, 44% to the CDC, and major workforce layoffs, hospitals nationwide are bracing for impact.
What’s at Stake
- NIH Cuts: Funding would drop from $47B to $27B, consolidating 27 institutes into 8 and eliminating programs focused on minority health, nursing, and more. Hundreds of grants have already been canceled.
- CDC Reductions: The budget would shrink from $9.2B to $5.2B, wiping out all chronic disease and domestic HIV programs.
- Medicaid Threats: A proposed $880B cut over eight years could strip coverage from millions and destabilize hospital finances, particularly in Medicaid-heavy regions.
- Workforce Losses: HHS is already downsizing by 20,000+ staff, including thousands at NIH and CDC, weakening research, surveillance, and hospital support.
Impact on Hospitals
- Reduced Care and Coverage: Medicaid cuts will force hospitals, especially rural and safety-net facilities, to scale back services like maternal care, addiction treatment, and chronic disease management. Medicaid cuts could mean fewer insured patients, more uncompensated care, and rising financial strain.
- Stalled Research and Innovation: NIH cuts could halt clinical trials and research into cancer, infectious disease, and more. Academic medical centers risk losing top researchers, clinical infrastructure, and long-term innovation capacity, which directly limits access to clinical trials and cuts off pathways to breakthrough treatments for patients.
- Weakened Public Health Response: CDC funding loss will undercut disease tracking, vaccine programs, and outbreak response, leaving hospitals more vulnerable to emerging threats.
- Economic Ripple Effects: Hospitals are major employers, and funding cuts will ripple through departments tied to research, public health, and grant-supported programs. NIH and CDC reductions will directly impact research coordinators, lab technicians, and public health outreach staff, particularly at AMCs, while potential Medicaid cuts could force staffing reductions in clinical support roles, especially in rural and safety-net hospitals where margins are already tight. Some facilities may not be able to close those gaps.
Bottom Line
These proposed cuts could reshape how hospitals operate, limit access to care, stall scientific progress, and weaken public health infrastructure, especially for rural and vulnerable populations. Congress has the final say. The months ahead will determine whether these cuts take hold or whether hospitals will see the direct impacts.
