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Moody’s Investors Service

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Moody’s: Long-term ACA impact on nonprofit hospitals still unknown


Moody’s Investors Service, the financial-ratings company, says that the long-term impact of the health-insurance exchanges set up under the Affordable Care Act remains uncertain. But it says that developments over the next  two years will probably clarify the ACA’s credit implications for nonprofit and government-owned hospitals.

As Moody’s notes, many private-sector payers have lost money selling individual insurance products on the exchanges, leading some to decide to pull back from some regional markets starting next year.

The firm says this  is bad for the hospitals because it means fewer coverage options for patients and probably a higher uninsured rate.

Further, high-deductible  insurance plans sold on the exchanges could also hurt nonprofit hospitals’ finances.

For a more detailed article on this, please hit this link.

Good news, for now, for not-for-profits



Moody’s cited increased patient volume and reduced bad debt, both boosting cash flow. But the improvement varies a lot by geography, with hospitals in states that agreed to expand Medicaid eligibility under the Affordable Care Act doing the best.
The drop in the unemployment rate and the aging of the population have played major roles, too, as have tighter controls on employee and supply costs.
Will the improvement continue as hospitals invest heavily in population-health management, build more outpatient facilities for patients requiring less acute care, spend more on electronic health record systems  and face competition from  burgeoning drugstore clinics — all of which could reduce revenue? Ask us in a year.

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