A decision by a three-judge panel of the D.C. Circuit Court of Appeals in Washington holding that tax subsidies to low- and middle-income Americans may not be provided in states that use the federally-run health insurance exchanges could reduce growth prospects for health insurers, according to Fitch Ratings.
Although the appeals court in
A three-judge panel in a
The ultimate fate of the subsidies will likely be decided by the U.S. Supreme Court, but if the decision from
Here are four things to know about how health insurers could be negatively affected by the elimination of the subsidies, according to Fitch.
1. The disruption to the subsidies would raise the price of health insurance plans offered on the exchanges and reduce the attractiveness of the plans to consumers.
2. The elimination of the subsidies would add uncertainty around enrollment trends and the profitability of companies offering insurance plans on the exchanges.
3. If the
4. The growth some health insurance companies have seen through the exchanges has acted as a margin compression mitigant from the implementation of fees designed to fund certain PPACA provisions and lower Medicare Advantage funding levels. However, if the
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