HCA Projects Resilient 2026 Despite Warning of ACA, Medicaid Headwinds

Following its fourth-quarter earnings report, the for-profit giant revealed the looming financial impact of policy changes and how resiliency initiatives could soften the blow.

HCA Healthcare closed out 2025 with a strong fourth quarter that delivered gains, even as leadership pulled back the curtain on what could be significant headwinds tied to the expiration of enhanced Affordable Care Act (ACA) premium tax credits and changes in Medicaid supplemental payments.

In the fourth quarter, the for-profit health system reported revenue of $19.5 billion, up 6.7% year over year, and net income attributable to the company that rose 30.6% to $1.9 billion. The results capped a year of record patient encounters and volume growth across the network that culminated in $70.6 billion in revenue and $6.8 billion in net income across the 12 months.

However, in an earnings call with investors, HCA leadership quantified the potential downside from the combination of the lapse of enhanced ACA subsidies, administrative reforms under the One Big Beautiful Bill Act, and reductions in supplemental Medicaid payments.

CFO Mike Hart told investors the company is projecting a hit to adjusted EBITDA in 2026 of between $600 million and $900 million from health insurance exchange dynamics, including the expiration of premium tax credits.

HCA also flagged a projected net benefit decline of $250 million to $450 million from changes in state Medicaid supplemental payment programs this year due to program changes in Tennessee, a program pause in Texas, and effects from a one-time Virginia payment.

Collectively, these policy changes affect payer mix and uncompensated care exposure. HCA reported that exchange plan volumes represented about 8% of admissions and 10% of revenue in 2025, and the health system is expecting a 15% to 20% decline in exchange volumes in 2026, with much of that shifting either to employer coverage or uninsured categories.

To alleviate policy impacts and offset about $400 million in losses to the exchange market, HCA is utilizing a multi-year resiliency program focused on cost efficiency, revenue integrity, and capacity management, leadership highlighted.

HCA CEO Sam Hazen pointed to investments in network expansion, workforce development, and clinical capabilities that helped drive margin improvement and sustained demand, providing HCA with buffers if coverage risk pressures intensify.

“This is not an episodic event for us,” Hazen said during the earnings call. “It just happens to be a maturation of what in my estimation is cultural within HCA, and that is being cost effective in finding ways to leverage scale, utilize best practices. Now we have tools that are in front of us as opportunities to create even more consistency, efficiencies, and transparency in the company's overall cost. And that's why the program is lining up in a well-timed manner with some of the enhanced premium tax credit challenges.

“But we see this program continuing to mature. And as we get more capable at using these tools, it's going to help us find even more opportunities. But this is not a one-time event. It's a cultural dynamic in our company around being cost effective, being high quality, and finding ways to improve from a process standpoint and a leverage standpoint with our overall scale.”

Despite the headwinds, HCA provided bullish guidance for 2026, forecasting revenue between $76.5 billion and $80 billion, net income between $6.5 billion and $7 billion, full-year margins slightly above 20%, and adjusted EBITDA between $15.55 billion to $16.45 billion.

In 2025, same facility admissions increased 2.4% and same facility equivalent admissions grew 2.5%. For 2026, equivalent admissions are projected to grow 2% to 3%, even as executives brace for a 30% drop in utilization by patients that become uninsured.

HCA’s willingness to quantify the earnings impact of ACA subsidies expiration and to lay out expected Medicaid payment declines gives peers a better outlook for assessing risk. Hospitals with higher exposure to exchange populations or states with larger Medicaid populations could feel the ramifications more acutely.