Financial experts split on impact of ACA repeal and replace

Financial experts are torn over how President-elect Donald Trump's plans to repeal and replace the Affordable Care Act--with the help of a Republican-majority Congress--will play out.

Deep Banerjee, director at Standard & Poor's Global Insurance Ratings in New York City, said that any significant changes to the Affordable Care Act will take more than a couple of months to legislate and implement; he doesn’t expect a full repeal in Trump’s first 100 days as president.

“A ‘repeal and replace’ event will be a 2018 (not 2017) event for the insurance markets,” Banerjee said in an email to FierceHealthPayer Wednesday afternoon. He added that uncertainty is--somewhat paradoxically--the only surety shrouding the near-term future of the health insurance markets.

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Michael Trilli

Michael Trilli, senior insurance analyst at Aite Group, says repealing and replacing ACA would be one of the Trump administration's top priorities, but acknowledged that a GOP health law “alternative isn’t fully scripted yet.” 

The Affordable Care Act is like an octopus: Its arms are many and reach far yet all remain intertwined by complex structures that aren’t always visible on the surface, Beth Halpern, J.D., partner at the Hogan Lovells Washington, D.C., office, said Wednesday.

Trilli saw other opportunities offered by the election results, saying it would be a “boon” for health savings accounts as transactional and investment vehicles, drawing a parallel to 401(k) products, but that targeting individuals without discretionary income to save could be a challenge for the higher use of HSAs.

RELATED: Analysis: Time for GOP to prove it has a better plan for healthcare reform

For her own part, Ana Gupte, Ph.D., at Leerink Partners said in her post-mortem report that she expects "fundamental policy uncertainty and headwinds” for firms exposed to the individual exchanges and Managed Medicaid, specifically Anthem, Centene Corporation and Molina Healthcare.

Anthem’s shares closed Wednesday up 1.51 percent; Centene’s shares finished down 19.09 percent, and Molina’s shares ended down 15.78 percent. Gupte is bullish on Humana because of its Medicare Advantage exposure, UnitedHealth Group for its diversified book of business, and Cigna for its international business segments.

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Fitch Ratings released an updated report Wednesday via email saying that, on the surface, a material replacement of the ACA would prove “a credit negative for healthcare providers as it is contributing to higher volumes of insured patients,” adding that repeal may stifle progression of the transition toward value-based reimbursement schemes.