Though the GOP healthcare bill that just passed the House is hardly a done deal, analysts have no shortage of predictions about what the legislation would mean for the health insurance industry.
The American Health Care Act, which would repeal major provisions of the Affordable Care Act, advanced on Thursday after narrowly winning enough Republican votes. The Senate will now take it up, and is expected to make major changes to the budget reconciliation measure.
For health insurers, which are currently preparing their individual market filings for 2018, the bill’s advance still does nothing to address one of their major concerns—ensuring cost-sharing reduction subsidies continue to be funded.
“We need certainty now about funding for cost-sharing reductions that lower copayments for patients so they can better afford to get care from their doctor,” America’s Health Insurance Plans President and CEO Marilyn Tavenner said in a statement.
But Ana Gupte, an industry analyst at Leerink Partners, wrote in a research note that “the administration is also more likely to preserve cost-sharing subsidies with passage of repeal and replace.”
In addition, Gupte said some of the provisions included in the AHCA would be beneficial for health plans that participate in the exchanges. These include the widening of the community rating bands, funding aimed at stabilizing the exchanges and the permanent repeal of ACA taxes.
Indeed, while the bill would likely lower exchange enrollment, “we believe the AHCA could help stabilize the market,” Jefferies analysts David Windley and David Styblo wrote in their own research note. As far as other insurance business segments, they see the current bill as a net negative for Medicaid, positive for Medicare Advantage and mixed for commercial.
To Fitch Ratings’ Matt Rouck, meanwhile, the ACA repeal-and-replace effort could lead to wider variation in financial results across the U.S. health insurance sector, “as insurers in different states could be operating under different rules.”
Moving to a block grant or per-capita cap funding structure for Medicaid would likely adversely affect Medicaid-focused insurers, he wrote, though states might help by expanding risk-sharing arrangements as part of Medicaid managed care programs.
Fitch's overall outlook for the health insurance sector is negative, he added, partly because of the regulatory uncertainty that has loomed over the sector since the November 2016 elections.
Standard & Poor’s analyst Deep Banerjee was a bit more optimistic, noting that S&P isn’t taking any rating action on health insurers based on the AHCA.
“We expect insurers to adapt to the new rules if and when the AHCA becomes law,” he wrote in an announcement detailing his analysis. “However, in our opinion, there may be some hiccups initially because the proposed timeline for states and insurers to transition fully to the AHCA is a bit aggressive."