The chief executive of HCA Holdings Inc on Monday said he expects the Affordable Care Act to drive more growth for the U.S. hospital operator in 2016 as Americans sign up for insurance coverage through exchanges created under the law.
"We are very encouraged by the open enrollment results so far," R. Milton Johnson, CEO of the largest U.S. for-profit hospital chain, said in remarks at the J.P. Morgan Healthcare Conference in San Francisco.
HCA's shares were up about 6 percent at $68.12 in midday trading on the New York Stock Exchange.
About 11.3 million Americans have signed up so far for individual health insurance in 2016 through HealthCare.gov and the state-based exchanges, the U.S. government said last week. Enrollment for these plans, which were created under the health reform law known as Obamacare, closes on Jan. 31.
HCA on Friday raised its outlook for adjusted earnings in 2015, saying it admitted more patients to its hospitals and treated more people in its emergency rooms.
In October, HCA had warned of weaker-than-expected third-quarter results and said it was seeing more patients without insurance, including some who had purchased coverage through the exchanges but then dropped it in the second half of the year.
U.S. health insurers have said they are losing money on the exchanges because many of their patients are older or have high medical costs. UnitedHealth Group Inc, the largest U.S. health insurer, in November said it is considering exiting the exchanges in 2017 because weak enrollment and high costs were taking too big a toll on its performance.
HCA's Johnson on Monday said some attrition in exchange enrollment was to be expected in the second half of the year, after an initial spike higher due to the sign-up period. But he predicted the number of people dropping coverage would likely be relatively small. "We are going to see some seasonality in reform," he said.
Johnson said he expects additional states will opt to expand Medicaid coverage for the poor in future years under health reform, but not in 2016.
He also said HCA is interested in growth through acquisitions, but noted a lack of "willing sellers" in the market.
(Reporting by Susan Kelly in Chicago; Editing by Bernard Orr)