Nashville, Tenn.-based HCA Healthcare broke down why it had increased its overall loss estimate due to ACA-related headwinds from $1 billion to $1.2 billion in 2026 during its July 24 second-quarter earnings call.
“If you go back to our original set of assumptions, the volume declines that we’re seeing in first and second quarter on the exchanges, which are 15% in both the first and second quarter, are in line with our original guidance estimates in terms of exchange volume decline,” Mike Marks, CFO of HCA Healthcare, said on the call. “What’s different … is that we originally assumed that about 80% to 85% of the patients who lose exchange coverage would become uninsured, and our data is telling us now that it’s closer to 1-for-1.”
Mr. Marks said the updated estimate considers a variety of scenarios, but comes from what HCA has learned through the first six months of 2026. The system has also studied its past attrition rates over the last few years and pulled external data with updates throughout the year to secure its full year guidance.
Mr. Marks also said HCA started seeing slowing exchange volumes in the fourth quarter of 2025.
“Historically, over many years, our exchange volume would typically peak in the fourth quarter, but this was not the case last year,” he said. “In hindsight, we now believe that the exchange reforms that actually started late last year started having an impact, and specifically in Florida.”
HCA CEO Sam Hazen said during the call that three of the system’s 15 domestic divisions — Gulf Coast, North Florida and South Atlantic — accounted for about 50% of its overall ACA-related impact.
“Their composite adjusted admission decline in [health insurance exchanges] is somewhere between 25% and 28% for the first half of the year, and that has obviously created a lot of pressure,” Mr. Hazen said. “We didn’t expect it to be that much in those markets, and the teams have tried to adapt to it, as you would expect, as best they possibly can, but that’s a fairly sizable impact. It has had an outsized effect on the company.”
Mr. Marks said the payer mix shift tied to the exchanges had an approximately $400 million impact on adjusted EBITDA in the second quarter. Separately, HCA recognized about $400 million of incremental net benefit from Medicaid supplemental payment programs in the quarter, including $540 million related to an approved Florida program covering Oct. 1, 2024, to June 30, 2026. It was partially offset by retroactive payments the system received in the second quarter of 2025.
HCA expects Medicaid supplemental payment programs to provide $300 million to $500 million in net benefits in 2026, with a $100 million to $300 million headwind anticipated in the back half of 2026.
Looking ahead, Mr. Hazen said the system expects exchange-related attrition to ease in 2027, assuming no further changes to enhanced premium tax credits, which expired at the end of 2025.
“Clearly, there are other factors from both a policy and a market standpoint that could change our thinking,” he said. “At this particular point in time, that’s where we are. We, again, believe most of the attrition this year is directly attributable to patients who were benefiting from the enhanced premium tax credits. Now that those have gone away, we think we’ll be on a normal course as we push into 2027.”
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