Key facts
- HCA estimates the loss of federal ACA subsidies could cut its income by up to $1.2 billion in 2026.
- HCA expects net supplemental Medicaid benefits to decline $500 million to $650 million in 2027.
- Universal Health Services forecasts a $175 million to $200 million hit from lower supplemental payments.
- J.P. Morgan analysts estimated ACA enrollment declines will drag 2027 hospital profit growth by a low- to mid-single-digit percentage.
- KFF estimates Medicaid payment changes could put roughly $60 billion in federal hospital funding at risk once fully phased in.
- Tenet's outpatient surgery unit, about 40% of third-quarter adjusted core earnings, is less exposed to the coverage losses.
US hospital operators are preparing for revenue pressure from more patients losing Affordable Care Act coverage, a potential drop in government aid for treating Medicaid patients and deeper reimbursement cuts beginning in 2028, the companies said on conference calls after reporting quarterly results on November 5, 2026.
HCA Healthcare, Tenet Healthcare and Universal Health Services reported steady patient admissions supported by aging baby boomers who require more medical care. But rising numbers of uninsured patients are squeezing operating margins, the companies said. Emergency department care for people without health insurance often goes entirely unpaid, forcing providers to cover the costs. "They don't pay, so it's essentially a write-off," Jefferies analyst Brian Tanquilut said.
Some of the pressure comes as pandemic-era federal subsidies meant to lower the cost of health plans under the Affordable Care Act expired on January 1, 2026. That caused premiums to rise by two to three times for some enrollees, while others faced double-digit increases. More than 3 million people have dropped their plans.
J.P. Morgan analysts estimated that declining enrollment in government-run ACA exchanges, where people who do not get insurance through an employer can buy health plans, will create a low- to mid-single-digit percentage drag on 2027 profit growth for hospitals. HCA estimates the loss of the federal subsidies could reduce its income by up to $1.2 billion in 2026. HCA, Tenet and Universal reported year-over-year drops of 17% to 25% in third-quarter ACA exchange volumes, as patients who lost coverage largely shifted to self-pay.
Medicaid supplemental payments, which the government makes to help hospitals cover the cost of treating Medicaid patients, are set to fall sharply after boosting 2026 results. HCA expects net supplemental benefits to decline by $500 million to $650 million in 2027, while Universal Health Services forecasts a $175 million to $200 million hit. Tenet is relatively more insulated as its outpatient surgery-center unit, which accounted for about 40% of its third-quarter adjusted core earnings, is less exposed to exchange coverage losses and Medicaid reimbursement hits.
Some analysts said the healthcare cuts could be dialed back as Democrats have won a majority of the House and the Senate in the midterm elections. "We see the Democrats as most likely to focus on attempting to walk back changes to Medicaid and the ACA exchanges, but continue to see any meaningful traction as unlikely," J.P. Morgan analyst Lisa Gill said.