Moody's Investor Service said hospitals and payers would benefit from CMS' proposed rules to stabilize the 2018 health insurance exchanges.
CMS officials proposed regulations last week, which include: shortening the 2018 open enrollment period, adjusting minimum standards that determine coverage levels, giving insurers more time to file 2018 benefit changes, deferring review of provider network adequacy to states, requiring more documentation for special enrollment verification and allowing payers to collect premiums for previously unpaid coverage prior to enrolling an individual in next year's coverage.
"The proposal aims to improve the profitability of health plans offered on the exchanges so that insurance companies are incentivized to continue offering them," according to analysts at Moody's. "The rules would be credit positive for insurers and hospitals. Hospitals benefit from functioning health insurance exchanges because they are the primary vehicle for individuals to purchase health insurance and a smaller uninsured population reduces the bad-debt expense that hospitals need to absorb."
Moody's also said while it views insurer participation in exchanges as credit positive for hospitals, CMS' proposal may prevent some people from gaining insurance when they are in need of medical care and could lead to an increase in bad debt and uncompensated care for hospitals. However, hospitals stand to lose more from unstable exchanges that could collapse if such rules are not implemented, according to Moody's.