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Life Health > Health Insurance

Fitch: U.S. health insurance market should be fine

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A rating agency says U.S. health insurers should do fine in the coming year.

Analysts at Fitch Ratings have increased their rating outlook for the health insurers the firm rates to stable, from negative.

The analysts now expect group plan enrollment to grow about has quickly as U.S. gross domestic product (GDP), and they expect operating profit margins to continue to average about 7 percent to 8 percent of revenue.

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“Fitch expects little change in balance sheet fundamentals,” the firm says.

Firm analysts expect stockholders’ equity in the insurers to increase, and the insurers’ debt burden to shrink slightly.

Fitch also sees stability ahead for the major provisions of PPACA.

Analysts there do not expect to see major changes in the program to get implemented within the next two years, and they expect to see opposition to key program provisions to ease.

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Many organizations are making predictions about the coming year this month, but predictions by rating agencies can have a practical impact, because ratings can affect insurers’ ability to borrow money, what insurers pay to borrow money, and how much insurers can charge for insurance.

See also: Year in review: The 2013 health insurance landscape


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