Gov. Kay Ivey commits $40 million for capital expenses at Jackson Hospital
Gov. Kay Ivey has announced that she will commit $40 million for capital expenses at Jackson Hospital in Montgomery, but only after it has emerged from bankruptcy.
“For a year now, I have been engaged on the issues facing Jackson Hospital due to their previous mismanagement. There is new hospital leadership in place now, which I have confidence in, and I challenged local elected leaders to come forward with their own funding commitments.
“I am grateful to both the City Council and County Commission for answering that call. I am also proud to commit $40 million from the state for capital expenses at Jackson Hospital. These future funds would only be issued once Jackson Hospital emerges out of bankruptcy.
Gov Ivey took part in the Amendment 666 Bond Commission meeting today and joined the group in authorizing the future issuance of bonds to support the hospital.
“Right now in Montgomery, our healthcare system faces its own unique struggles with the current situation at Jackson Hospital. Losing a hospital in one of our large metropolitan areas would be devastating not just for the Montgomery community, but for the many residents in the surrounding counties it serves.
“For safety and security in our Capital City, it is important we maintain Jackson Hospital as a close by option for state government, elected leaders in the executive, legislative and judicial branches, as well as the many visitors, from our fourth graders to our tourists. And even more than that, it serves so many other Alabamians nearby, in both urban and rural areas.
Action 8 News has reported extensively on the financial struggles in recent years at Jackson Hospital.
In November, hospital executives told state and local leaders they would need $293 million to remain operational. With the county’s latest contribution, total funding committed by the city, county and state stood at $80 million at that time.
“I appreciate the political will that the commission demonstrated in approving the additional $7.5 million, which, matched by the state, becomes $15 million. It’s really the final piece of the $80 million we needed from city, county and state government,” Jackson Hospital CEO John Quinlivan told Action 8 News at that time.
He said the funding allows the hospital to move forward with a restructuring plan and present it to the bankruptcy court.
He said the hospital expects its restructuring plan to be approved, allowing Jackson Hospital to fully exit bankruptcy in the second quarter of 2026.
As Action 8 News has reported, the hospital filed for Chapter 11 bankruptcy protection in February of 2025. It missed a $60 million interest payment on bonds.
In filing for bankruptcy, Jackson Hospital said it experienced significant financial pressures in recent years due to increased labor costs, stagnant reimbursement rates, a challenging payor mix and fallout from COVID-19, among other factors. It said without Medicaid expansion in Alabama, it suffered significant financial losses due to its care for uninsured people. In 2023 alone, the hospital said gross charges related to the care of uninsured patients exceeded $45 million.
Jackson Hospital is licensed for 344 beds, serving Montgomery and the River Region as a community not-for-profit facility. It opened in 1946 with 37 beds and five doctors.
