By Atossa Araxia Abrahamian
NEW YORK, Nov 7 (Reuters) - Moody’s Investors service announced on Wednesday that the re-election of President Barack Obama was credit neutral for not-for-profit hospitals, but that uncertainty remains about the implementation of the president’s healthcare reforms.
The rating agency said that the so-called “individual mandate” -- the part of President Obama’s Patient Protection and Affordable Care Act that requires all individuals to obtain health insurance starting in 2014 -- now has greater chance of being implemented. This, said Moody‘s, was a “favorable outcome” for the industry because there will be fewer uninsured patients seeking care in emergency rooms, reducing the number of unpaid medical bills.
However, the reform remained a net long-term negative overall for not-for-profit hospitals because of significant reductions in Medicare and Medicaid funding, increased insurer regulation, and lower reimbursement rates.
Moody’s said the possibility of a full implementation of the healthcare law has been built into the negative outlook for the non-profit hospital sector. Still, it said that uncertainty about the future of federal healthcare policy persists and continues to heighten credit risk in an “already pressured operating environment.”