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Analyst: PPACA exchange sales high enough to help hospitals

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The public health insurance exchange system has already brought in 11.2 million plan sectors, which is enough for the system to meet the minimum plan selector goal for 2016, according to the U.S. Department of Health and Human Services (HHS).

The Centers for Medicare & Medicaid Services (CMS), an arm of HHS, manages Patient Protection and Affordable Care Act (PPACA) exchange enrollment for 38 states through the system.

About 8.5 million people had chosen 2016 qualified health plans (QHPs) through as of Jan. 2.

Thirteen states have their own exchange enrollment systems. By late December, about 2.7 million consumers had selected QHPs in those states, according to an HHS report.

In the past, about 80 percent to 90 percent of consumers who have selected QHPs have eventually paid for the coverage.

See also: Public exchange sign-ups top last year’s total and Effects of Jan. 1 coverage enrollment extension unclear

The PPACA open enrollment period started Nov. 1 and is set to end Jan. 31. In most states, the enrollment deadline for coverage that starts Feb. 1 is Jan. 15.

HHS officials predicted before the open enrollment period began that the exchange system could have about 11 million to 14.1 million QHP selectors by Jan. 31, and that 9.9 million people might be enrolled in paid-up QHP coverage at the end of the year.

Brian Wright, a health care services securities analyst at Sterne Agee CRT, said he originally assumed in his forecasts that the states would emerge from open enrollment with 11.15 million QHP selectors, or 27 percent more than they had a year earlier.

He has now cut his QHP growth estimate to 23 percent.

“We believe over 20 percent public marketplace enrollment growth in 2016 should put to rest investor concerns” about the effects of sluggish growth on hospital stocks, Wright says.

Wright says QHP enrollment growth over 20 percent should be strong enough to help companies such as Tenet Healthcare Corp. (NYSE:THC), HCA Holdings Inc. (NYSE:HCA), LifePoint Health Inc. (NYSE:LPNT) and Community Health Systems (NYSE:CYH).

See also: extends Jan. 1 coverage deadline 2 days

PPACA penalties will cost more than health coverage for millions

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