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Moody's Still Bearish on Not-for-Profit Hospitals

John Commins, for HealthLeaders Media, January 28, 2013

"There is a lot of uncertainty as to regulations the Obama administration is still rolling out with the health insurance exchanges, what sort of insurance products will be on them, how they are going to reimburse hospitals. Our feeling is that they are going to reimburse at lower rates than the typical commercial insurance that you and I might have. But there is a lot of uncertainty about where those rates will be and how many people will sign up for them."

As dour as the outlook may be for 2013, Steingart says there is nothing now to suggest that it will be any better in 2014 when key provisions of the Affordable Care Act take effect.

"Everybody seems to be fairly confused about what it means to participate in the health insurance exchanges," he says. "The insurers are worried that the relatively healthy won't sign up for insurance, paying the penalty and then signing up as soon as they have a condition. There is a lot of uncertainty about what kinds of products will sell best on the exchanges."

"So when we are sitting here next January there is still going to be a lot of uncertainty, but as 2014 unfolds we should have more clarity about how many people have signed up for insurance and what the Medicaid rolls are looking like in each state," he says.

"We expect that the hospital Medicaid payer mix will go up, but you won't start to see that in the numbers until maybe the first quarter of 2014, and you'll see it in audits for those with June 30 year-end. But you're talking about a six month lag before we really start to see it."

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