Special report highlights the impact Supreme Court ruling could have on hospitals
Moody’s Investors Services, often referred to as Moody’s, has released a special report concerning the insurance mandate provision of the Affordable Care Act within health care reform. The mandate has been at the heart of the controversy surrounding the federal law. According to the law, American citizens must purchase and maintain some kind of health insurance policy. Many states have accused the federal government of overstepping its boundaries by requiring people to purchasing health insurance. As a result, the Affordable Care Act is currently awaiting ruling from the U.S. Supreme Court concerning its fate.
Hospitals could struggle with higher insurance costs
Moody’s report suggests that if the insurance mandate is struck down by the Supreme Court, hospitals, and not just insurance companies, would struggle as a result. Moody’s notes that non-profit hospitals, in particular, will face significant struggles in adapting to higher costs of insurance coverage as insurers attempt to raise rates to account for being required to provide coverage for the very ill. Without the insurance mandate, the report claims that healthy consumers will have no reason to purchase insurance coverage. As such, insurers will be left with only unhealthy consumers and the large claims they often generate.
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Private health insurance market could collapse without mandate
The report claims that the private health insurance market would collapse if the insurance mandate is struck down. Moody’s believes that many insurance companies will not be able to withstand the pressures of adhering to the strict regulations imposed by the Affordable Care Act without the financial incentives created by the insurance mandate provision. These companies would be struggling to survive in an unbalanced environment, working to attract healthy consumers while still providing costly care for the unhealthy.
Moody’s advocates voucher system for health insurance
Moody’s believes that the abolishment of the insurance mandate would make the other supposedly negative aspects of the Affordable Care Act seem much more dubious. The firm has issues recommendations along with its special report, suggesting that the federal government could adopt a kind of voucher system for health insurance. This system would award random individuals with public financial aid when they purchase health insurance policies. This too could create problems for hospitals, however, many of which are impossible for Moody’s to predict.