HCA Sees Flat 2027 Earnings As Medicaid Payments Drop $550 Million To $650 Million
CEO Sam Hazen says exchange coverage losses and fading state payments will be offset by cost savings, with full guidance due in January.
HCA Healthcare, which runs hospitals and outpatient care facilities in the United States and England, expects 2027 earnings to be "generally consistent with 2026," CEO Sam Hazen said on the company's third-quarter earnings call Tuesday. Hazen called the view preliminary and said full-year guidance will come in January, as HCA expects $550 million to $650 million less in Medicaid supplemental payment net benefits next year.
How the 2027 puzzle fits together
Hazen laid out four early pieces. Volume growth should run 2% to 3%, which he said is consistent with the company's long-term thinking. He said it is reasonable to assume fewer people lose coverage on the health insurance exchanges than in 2026, though he still expects a meaningful hit to payer mix.
The Medicaid drop comes from state programs that won grandfather approvals in 2026 and reimbursed HCA for services provided in prior years. CFO Mike Marks said most of it traces to Florida, with the rest tied to other grandfather states such as Virginia and Georgia.
Offsetting that, Hazen anticipates favorable cost performance from the company's enterprise-wide resiliency program and operating leverage from volume growth. Beyond 2027, he said, performance should move closer to long-term growth targets, assuming the worst exchange payer-mix effects pass, no material policy changes arrive beyond H.R. 1, and strategic initiatives deliver.
Analysts press for numbers
A UBS analyst asked for the size of the exchange headwind and whether cost savings would match this year's resiliency program. Marks did not put figures on either. He said management must first see fourth-quarter results and exchange enrollment, which opens November 1 and runs to mid-January.
Marks said Medicaid work requirements under H.R. 1 would apply to about 15% to 20% of HCA's Medicaid patients, and he expects a modest effect in 2027. Expansion states account for 40% of its Medicaid volumes and revenues, he said.
A third quarter that beat internal expectations
Hazen said adjusted admissions on a same-facility basis grew 3%, the 22nd straight quarter of volume growth, and diluted earnings per share as adjusted rose almost 4%. Results slightly exceeded management's expectations.
Exchange admissions fell about 19% from a year earlier, worse than the 15% to 16% decline Marks said the company had guided to, though they improved about 8% from the second quarter. Uninsured volume was about 10.5% of total equivalent admissions, against 8.5% a year earlier. Marks put the payer-mix hit to adjusted EBITDA at about $400 million for the quarter.
HCA raised its 2026 estimate for incremental Medicaid supplemental benefits to $600 million to $800 million, and expects to land in the upper half of its 2026 guidance ranges. It bought back about $3 billion of stock in the quarter and expects to finish most of its authorized repurchase program by year-end. HCA shares traded at $442.49 in Tuesday trading.
The next marker is HCA's fourth-quarter call in January, when it will give full 2027 guidance after exchange enrollment closes.
Sources
- HCA Healthcare beats quarterly profit estimates on demand for medical services — Reuters
- HCA Healthcare Stock Nears Buy Point Despite Uninsured Cost Jump | Investor's Business Daily — investors.com
- HCA Healthcare (HCA) Q3 Earnings and Revenues Top Estimates — Yahoo Finance
- What Is Drawing Fresh Attention To HCA Healthcare (HCA)? — Yahoo Finance
- HCA Healthcare Q3 2026 Earnings Preview (NYSE:HCA) | Seeking Alpha — seekingalpha.com
