LabCorp exec says assumption for about 30 basis points impact to 2026 diagnostics volume from ACA-related changes remains appropriate - conf call

LabCorp Holdings Inc. (NYSE: LH) has maintained its assumption that the Affordable Care Act (ACA) related changes will result in a 30 basis point impact on diagnostics volume for 2026, according to remarks made during the company’s Q1 2026 earnings call. This estimate is factored into the company’s full-year guidance for diagnostics revenue growth, which remains in the range of 5.1% to 5.9%.

During the call, CFO Julia Wang noted that while the impact of ACA-related changes on diagnostics volume was immaterial in Q1 2026, the company continues to monitor the situation closely. She emphasized that the 30 basis point estimate is consistent with current expectations and is included in the company’s updated guidance. This assumption reflects the potential for reduced testing utilization among insured groups, despite slightly better-than-expected enrollment trends in the first quarter.

LabCorp’s Q1 2026 diagnostics revenue reached $2.8 billion, representing a 5% year-over-year increase. Organic growth contributed 2.9% to this increase, while acquisitions and foreign currency translation added 2% and 0.2%, respectively. Despite a $15 million revenue impact from adverse weather in Q1, the company reported strong performance in specialty testing areas such as oncology, neurology, and autoimmune disease, which are growing significantly faster than the broader diagnostics market.

The company’s updated full-year 2026 guidance reflects confidence in its ability to navigate potential headwinds, including ACA-related changes. LabCorp expects enterprise revenue growth of 5% to 6.1% and adjusted EPS between $17.70 and $18.35. The guidance also includes a 40 basis point foreign currency tailwind and assumes continued margin expansion in both the Diagnostics and Biopharma Laboratory Services (BLS) segments.

LabCorp’s strategic initiatives, including the expansion of health system partnerships and the deployment of AI-driven tools, are expected to support volume growth and operational efficiency. These efforts are part of the company’s broader strategy to enhance its position in high-growth specialty testing areas and to improve customer engagement through digital platforms such as the upcoming MyLabcorp mobile app.

While the ACA-related impact remains a factor in the company’s planning, LabCorp’s leadership expressed confidence in its ability to mitigate potential challenges through strategic actions and operational improvements. The company’s updated guidance and performance in Q1 2026 underscore its resilience and adaptability in a dynamic regulatory and market environment.