U.S. hospital chains are facing a growing squeeze on profits as more patients lose insurance and Medicaid support declines, even though admissions remain steady, partly because of the aging baby boomers.

The loss of federal subsidies for ACA plans has pushed some premiums to two or three times their previous levels, and more than 3 million people have dropped coverage; hospitals say some patients who lost ACA plans are paying out of pocket, leaving emergency-care costs unpaid.

The strain is already showing up in exchange volumes: HCA Healthcare, Tenet Healthcare and Universal Health Services reported third-quarter ACA exchange volumes down 17% to 19% year over year, and HCA estimates subsidy losses could cut its 2026 income by as much as $1.2 billion.

J.P. Morgan analysts expect falling ACA enrollment to weigh on hospital profit growth by a low- to mid-single-digit percentage in 2027.

Beginning in 2027, certain working-age adults enrolled through Medicaid expansion programs will have to meet work or community-service requirements to keep coverage, potentially increasing uncompensated care; analysts say the direct profit effect may be limited because Medicaid patients generally generate low margins.

Medicaid supplemental payments are expected to fall after supporting 2026 results: HCA forecasts a $550 million to $650 million decline in net benefits in 2027, while Universal Health Services expects a $175 million to $200 million hit.

A larger, longer-term challenge arrives in 2028, when certain supplemental Medicaid payments will be reduced by 10 percentage points annually; KFF estimates roughly $60 billion in current federal hospital funding could be at risk once the changes are fully phased in.

Analysts expect the Medicaid payment reductions to pressure hospitals for several consecutive years, potentially creating a more lasting profit headwind than work requirements; J.P. Morgan analyst Lisa Gill said efforts to reverse ACA and Medicaid changes may lack meaningful traction.

Tenet may be less exposed than its peers because outpatient surgery centers generated about 40% of its third-quarter adjusted core earnings and are less affected by ACA coverage losses and Medicaid reimbursement reductions.