HCA Healthcare Slumps 3%—What’s Driving the Slide?

• HCA Healthcare (HCA) plunges 2.88% to $369.48, erasing $2.9B in market cap.
• Appoints former Subway CEO John Chidsey to board, signaling governance overhaul.
• Senate GOP Medicaid cuts spark sector-wide fears, dragging Tenet (THC) down 3.07%.

HCA’s sharp decline mirrors broader healthcare sector anxieties, with shares hitting intraday lows of $369.18 after Senate reconciliation bill updates reignited policy uncertainty. The stock now trades 12% below its 52-week high of $417.14.

Senate Policy Uncertainty Weighs on Healthcare Stocks
The sell-off stems directly from renewed Senate GOP efforts to slash Medicaid spending in reconciliation bills. Analysts at BofA warned this week that revised provisions pose ‘more negative’ risks for hospitals, spooking investors. HCA’s 2.88% drop mirrors broader sector turbulence, as the parliamentarian’s rejection of prior cuts earlier this month failed to quell concerns. The company’s inclusion in defensive indexes like Russell 1000 offers little solace amid regulatory crosswinds threatening reimbursement models.

Hospital Sector Drags as Medicaid Cuts Loom
HCA’s decline mirrors sector leader Tenet Healthcare (THC), which fell 3.07% on identical policy risks. Both companies face headwinds from Medicaid reimbursement uncertainties, with Tenet’s rehab hospitals (a key profit driver) particularly exposed. The sector’s 2024 underperformance—down 8% YTD vs. S&P 500 gains—reflects investor wariness toward regulatory volatility. HCA’s 13.8x trailing PE remains attractive, but policy clouds have dimmed short-term momentum.

Bearish Technicals and Put Options Target Medicaid Policy Risks
Bollinger Bands: $368.99 lower band breached, signaling oversold territory. MACD: -0.55 histogram confirms bearish crossover. RSI: 51.93 neutral zone.

Bearish momentum favors selling into $378 resistance. Aggressive traders should monitor the $365–$370 support cluster. Key sector ETFs like VHT (-1.2%) and IHF (-0.9%) reflect broader weakness.

Top Picks:
1. HCA20250815P370 (Put, $370 strike):
- Implied Volatility: 33.23%
- Delta: -0.47, Gamma: 0.011, Theta: -0.008
- 26.62% leverage ratio with $29,190 turnover ensures liquidity.
- Ideal for a 5% downside scenario: payoff would hit $10.62 if HCA drops to $359 (5% below $370).

2. HCA20250815P355 (Put, $355 strike):
- Implied Volatility: 30.98%
- Delta: -0.30, Gamma: 0.010, Theta: -0.048
- 55.22% leverage ratio highlights high risk/reward.
- Triggers payoff if Medicaid cuts force a 3% drop below $360.

Hook: ‘Bears target $360—HCA20250815P370 offers premium decay plays.’

Backtest HCA Healthcare Stock Performance
After a -3% intraday plunge, HCA has historically shown a mixed but positive short-to-medium-term performance. The backtest data reveals the following patterns:1. Short-Term Gains: The 3-day win rate is 52.40%, indicating that over half of the time, HCA rebounds within 3 days, with an average return of 0.11%.2. Medium-Term Gains: The 10-day win rate is also high at 52.22%, suggesting that HCA tends to recover within 10 days, with an average return of 0.19%.3. Long-Term Performance: The 30-day win rate is 50.62%, showing a slight decline in performance over longer periods, but with a maximum return of 0.24% observed on day 30.4. Maximum Return: The maximum return following the intraday plunge is 0.24%, which occurs on day 1, indicating that there is typically some recovery immediately after the initial drop.In conclusion, while there is some volatility, HCA tends to perform well in the immediate aftermath of a -3% intraday plunge, with a higher probability of positive returns over the short and medium term.

HCA’s Fate Hangs on Policy and Earnings
HCA’s near-term outlook hinges on two critical catalysts: Senate reconciliation bill outcomes and its Q2 earnings report. With Tenet (THC) also under pressure, the sector’s Medicaid exposure remains unresolved. Investors should prioritize downside protection near $360 while monitoring 30-day support at $377.23. Aggressive traders may consider shorting VHT ETFs until policy clarity emerges, but long-term bulls should await a rebound above $385—a level tied to its 30-day moving average. Watch for $360 breakdown or Senate rule changes—either could reset the sector’s trajectory.