July 14 (Reuters) – HCA Healthcare cut its annual profit forecast on Tuesday, citing a rise in the number of uninsured patients, largely those who lost coverage under “Obamacare” plans.
Americans are dropping off the plans — established under former President Barack Obama’s Affordable Care Act — this year as many struggle to make payments due to the end of extra subsidies created during the COVID-19 pandemic.
“Obamacare” enrollment fell 13% this year, and hospitals are now facing a decline in elective surgeries and diagnostic volumes, even as their costs rise from providing uncompensated care to a growing number of uninsured patients.
Shares of HCA, the largest for-profit U.S. hospital operator, fell 6% in morning trading, while those of smaller peer Tenet slid more than 2%. Universal Health Services’ stock fell 5%.
“We view today’s announcement as disappointing and meaningfully below lowered expectations,” said Barclays analyst Andrew Mok.
For the second quarter, the hospital operator saw a 2.5% increase in same-facility admissions, while inpatient and outpatient surgeries declined.
HCA now sees annual profit per share between $28.7 and $30.5, compared with its previous forecast range of $29.1 to $31.5.
The company estimated the shift in patients had an unfavorable impact of about $400 million in the second quarter. This includes an increase of about $75 million related to HCA’s previous estimate of the first quarter health insurance exchange impact.
The hospital chain also narrowed its annual revenue forecast to a range of $77 billion to $79.5 billion, compared with its previous expectation between $76.5 billion and $80 billion.
It reported preliminary second-quarter revenue of $20.23 billion, higher than analysts’ average expectation of $19.43 billion, according to data compiled by LSEG.
HCA will host its second-quarter earnings call on July 24.
(Reporting by Christy Santhosh in Bengaluru; Editing by Leroy Leo)
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