Updated Version 4 - HCA expects flat earnings in 2027 due to reduced Medicaid payments; shares decline

Story rewritten to include details from the conference call, analyst commentary, and peer stock movement

Sahil Pandey/Kamal Choudhury

Reuters, October 27 - U.S. hospital operator HCA Healthcare (HCA.N) indicated on Tuesday that its 2027 profits will likely be flat, as reduced Medicaid payments and a rise in uninsured patients may offset stable patient demand, leading its shares to fall over 5%.

On an analyst call following the earnings release, CEO Sam Hazen said, “We expect earnings in 2027 to be essentially flat compared to 2026,” while noting that the policy landscape remains uncertain. HCA will provide a full 2027 outlook in January.

Julie Utterback, an analyst at Morningstar, said: “The market appears disappointed with management’s guidance of flat earnings for 2027,” adding that this implies next year’s earnings-per-share may come in lower than forecast.

According to data compiled by London Stock Exchange Group (LSEG), analysts on average forecast 2027 earnings per share of $32.14.

The company said its 2026 financial results should come in the upper half of its forecasted range of $28.70 to $30.50 in annual earnings per share, with revenue between $77 billion and $79.5 billion.

HCA expects 2025 volumes to grow by 2% to 3%.

“Although the company projects continued solid volume growth for 2027, headwinds related to rising uninsured rates—including further shrinkage in individual insurance exchanges, new Medicaid policies, and reduced direct supplemental payments through Medicaid—are likely to constrain profit growth in 2027 and beyond,” Utterback added.

Peer companies Tenet Healthcare (THC.N) and Universal Health Services (UHS.N) also saw their shares drop by 2% and 6%, respectively.

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Medicaid and Uninsured Headwinds

HCA expects net income from Medicaid supplemental payments to decrease by $550 million to $650 million next year compared to 2026. Some state-approved programs in 2026 reimbursed the company for services provided in prior years.

Hazen added that, although fewer patients might lose coverage next year, the loss of coverage on Affordable Care Act exchanges is still expected to have “a meaningful impact on payer mix.”

Earlier in the day, HCA reported third-quarter results: revenue of $19.85 billion and adjusted earnings per share of $7.22—both figures beating Wall Street estimates.

HCA stated that an increase in the number of uninsured patients—largely those losing coverage through exchanges—reduced its third-quarter pre-tax profit by about $400 million.

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