Early Tuesday, a U.S. appeals court in
We believe any disruption to the subsidy will raise the price and reduce the attractiveness of exchange-sourced health plan enrollment. This could once again add uncertainty around enrollment trends and exchange-sourced business' profitability.
The change to subsidies will significantly reduce growth prospects as health insurers have been relying on exchange sourced business as a source of enrollment and revenue growth. The ruling also raises questions regarding adverse selection since healthy individuals are more likely to let their insurance lapse absent the subsidy versus unhealthy people.
If implemented, we believe that the
Fitch continues to believe that health insurers' 2014 margins face pressure from the implementation of industrywide fees designed to fund certain ACA provisions, lower
Additional information is available on www.fitchratings.com.
The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.
Source: Fitch Ratings
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