Will the healthy young consumers who still lack health coverage be willing to pay the higher prices public exchange plan issuers want to charge enrollees next year?
Stephen Zaharuk, a senior vice president at Moody’s Investors Service, raises that question in a commentary in a Moody’s review of the U.S. health care system. Zaharuk and other Moody’s analysts are still trying to figure out how the big new Patient Protection and Affordable Care Act (PPACA) changes are affecting the debt issuers they rate.
Zaharuk, who rates commercial health insurers, says information about the performance of insurers’ public exchange qualified health plans (QHPs) is still emerging.
At this point, he says, “the enrolled population appears to be less healthy, with higher utilization of medical services. As a result, insurers have filed rate increases for a majority of their policies to be sold on the exchanges for 2015.”
The higher prices could hurt QHP issuers’ efforts to attract healthier consumers, Zaharuk says.
Zaharuk says any problems with individual QHP program performance should have a modest effect on the big issuers he rates, because none of the issuers has more than 6.3 percent of its total medical membership in individual exchange QHPs.
Moody’s hospital analysts are also having trouble getting detailed PPACA impact numbers.
Dean Diaz, an analyst who rates for-profit hospitals, has the most data: information about the PPACA Medicaid expansion program has cut the percentage of incoming hospital patients who have to pay for their own care out of their own pockets.
At HCA Inc., for example, the percentage of self-pay and charity-care admissions fell to 6.8 percent in the second quarter of 2014, from 8.1 percent from the second quarter of 2013.
“While Medicaid reimbursement is lower than what Medicare or commercial insurance pays, it is more than what hospitals would receive, on average, from self-pay or uninsured patients,” Diaz writes in a commentary on the state of for-profit hospitals.
PPACA “is having a profound effect on for-profit hospitals operators in 2014 and will continue to remain credit positive for these companies over the next 12-18 months,” Diaz writes.
But Diaz and Kay Sifferman, an analyst who rates not-for-profit hospitals, are not yet able to provide detailed data on how quickly Medicaid or public exchange qualified health plans (QHPs) are paying the hospitals, or detailed data on how revenue from the Medicaid and QHP patients compares with the revenue the hospitals would have gotten from charity-care programs and the patients themselves.