HCA's Uninsured Patients Hit 10.5% Of Volume As Exchange Losses Cost About $400 Million In A Quarter
CFO Mike Marks says people losing exchange coverage are becoming uninsured almost one-for-one, and elective surgery is weakening.
HCA Healthcare, the hospital operator, is losing patients from health-exchange plans faster than it planned, and almost all of them are becoming uninsured, CFO Mike Marks said on the company's third-quarter earnings call Tuesday. He put the quarter's hit to adjusted EBITDA from that payer-mix shift at about $400 million.
Uninsured volume climbs two points
Marks said uninsured patients made up about 10.5% of total equivalent admissions in the quarter, against 8.5% a year earlier. Patients who lost exchange coverage migrate almost one-for-one to uninsured, he said, and that accounts for about 80% of the growth in uninsured volume.
Exchange admissions fell about 19% from a year earlier, worse than the 15% to 16% decline the company's second-quarter guidance implied. Marks noted that the third quarter of 2025 was the high mark for exchange volume, and that exchange volume improved about 8% from the second quarter to the third.
HCA now expects the full-year payer-mix hit to adjusted EBITDA to land at or slightly above the upper end of its prior estimates.
Guidance walk and elective surgery
Asked by a Bank of America analyst to walk through the guidance, Marks said supplemental Medicaid payments raised the net-benefit outlook by about $300 million and the exchange headwind rose by $100 million to $200 million. Core growth is the third piece. The company reaffirmed 2026 guidance and expects to land in the upper half of its ranges. It now sees the full-year Medicaid supplemental benefit at $600 million to $800 million.
Surgery is soft. Inpatient surgeries fell 1.4% and outpatient surgeries fell 3.7%, while ambulatory surgery center volumes fell 5.4%, with exchange patients the main pressure, Marks said. CEO Sam Hazen told a Cantor Fitzgerald analyst the exchange coverage loss is "a very large percentage" of the elective weakness. Emergency surgical volumes kept growing.
Overall, same-facility equivalent admissions rose 3%, and ER visits rose 5.1%. Diluted earnings per share, as adjusted, rose almost 4%, Hazen said.
A flat 2027 earnings outlook
HCA Healthcare operates hospitals and outpatient facilities in the United States and England. Hazen said he expects 2027 earnings to be generally consistent with 2026, with volume growth of 2% to 3%, fewer exchange coverage losses than in 2026, and $550 million to $650 million less in Medicaid supplemental payment benefits. Cost savings from its resiliency program should help offset those. Full guidance comes in January.
The company spent about $3 billion on share repurchases in the quarter and paid $165 million in dividends. Marks said it expects to complete most of its authorized buyback by year-end. Management was not ready to project fourth-quarter exchange volume sequentially.
Open enrollment for exchange plans starts November 1 and runs to mid-January, and Marks said that, with fourth-quarter results, will shape the 2027 guidance HCA gives in January.
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
