Most of the U.S. Blue Cross and Blue Shield companies have more than enough capital to handle the Patient Protection and Affordable Care Act (PPACA) squeeze, but, eventually, the squeezing could hurt their ability to pay back loans.
Deep Banerjee and other credit analysts at Standard & Poor’s Ratings Services have given that assessment in a commentary on how PPACA has affected the 37 Blues companies.
What rating analysts at S&P and other rating agencies think about the Blues matters to health insurance producers because credit ratings affect whether insurers can get capital from investors, and how much they have to pay for the capital. That, in turn, affects what insurers can do and how much customers trust the insurers to pay claims.
Members of the Blue Cross and Blue Shield Association now provide or administer health coverage for 105 million people. Many of the companies supported the health reform policy debates that eventually led to the passage of PPACA and the creation of the PPACA public exchange system, the PPACA Medicaid expansion program, the PPACA health insurance subsidy programs, the PPACA medical underwriting restrictions, and the PPACA individual and employer “shared responsibility” provisions, and the
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In most states, Banerjee and the other analysts say, the Blues ended up with a dominant share of the PPACA exchange qualified health plan (QHP) enrollees.
For now, based on the results of the open enrollment for 2014 coverage, the PPACA exchanges “might as well be called ‘Blue Exchanges,’” Banerjee and his colleagues write.
The Blues “will reap the benefits or suffer the consequences of being early adopters,” the analysts write.
See also: Blues may rise or fall with exchanges
PPACA fees, underwriting rules and benefits requirements also affect the products the Blues sell outside the exchange system.
For more about the S&P analysts are saying about PPACA and the Blues, read on.