Carriers’ credits will depend on exchange enrollment

For-profit hospital operators stand to gain from enrollment in the exchanges if it reduces the number of uninsured individuals who are unable to pay for care.

A reduction in the number of uninsured individuals treated at the hospital would lower bad debt expense and have a positive impact on margins, said Dean Diaz, Moody’s senior vice president.

But higher-than-expected enrollment could have a downside for not-for-profit hospitals if it is comprised primarily of people switching out of commercial plans. “New enrollees would likely shift from commercial insurance to more affordable, low-premium health-care exchange products, which are expected to reimburse at rates lower than traditional commercial insurance,” said associate analyst Carrie Sheffield.

The exchanges will positively impact both pharmaceutical companies and the pharmacy-benefit management sector, even if enrollment isn’t very high.

Additionally, Moody’s analysts said the exchanges will unlikely have any impact on medical device manufacturers.

See also:

• California exchange draws heavy interest
• PPACA exchanges open to surge of new customers
• 5 ways industry trailblazers are preparing for PPACA