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TMCNet:  Fitch: ACA Expansion Will Have Varied Impact on U.S. Hospitals

[December 16, 2013]

Fitch: ACA Expansion Will Have Varied Impact on U.S. Hospitals

NEW YORK --(Business Wire)--

Increases in enrollment in healthcare plans through federal and state exchanges are likely to have a mixed impact on not-for-profit hospitals, Fitch Ratings says. Reimbursement rates on exchange plans are generally lower than those from employer-based commercial plans. Additionally, most of the plans to be purchased through the exchanges are likely to be silver or bronze plans that carry higher deductible and co-pays. The benefit of increased coverage may not translate into increased volumes and could be muted by rising bad debt expense. The total number of enrollees through the exchanges remains uncertain.

Health and Human Services reported that nearly 365,000 individuals had selected plans from the state and federal marketplaces by the end of November and 250,000 of them chose plans in that month alone. Approximately 1.9 million have gone through the process but not selected a plan. Another 803,077 were determined to be eligible for Medicaid or the Children's Health Insurance Program in October and November.

The key provisions of the Affordable Care Act (ACA) are slated to take effect in 2014. The Congressional Budget Office projected seven million individuals getting insurance coverage through the newly created health insurance exchanges in 2014 and another nine million people getting coverage through expanded Medicaid eligiility.


Despite these projections, uncertainty remains around issues with the federal website and the poor publicity associated with the rollout of Healthcare.gov. Public skepticism of the ACA may put downward pressure on enrollment.

Additional information is available on www.fitchratings.com.

The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.


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