The omnibus spending bill signed into law Dec. 18 creates additional uncertainty for many health insurers, Fitch Ratings said Wednesday in an official statement.
The spending bill offers health insurers a short-term reprieve by delaying three Affordable Care Act corporate taxes and blocking appropriations for the risk corridors program. However, the bill casts uncertainty on whether health insurers that become beneficiaries of the ACA's key risk sharing programs will ever see full claims benefits, according to Fitch.
While the bill's delayed tax is well received by health insurers, Fitch argues smaller insurers could bear the financial brunt should the risk corridors program be reduced further. Moreover, it is unclear whether tax delays could hurt funding for ACA risk sharing programs, Fitch added.
Regarding the delayed tax programs themselves, Fitch argued the 2017 reprieve on the Health Insurance Industry Tax and the 2017 and 2018 reprieve on the Cadillac tax help make insurance policies more affordable for consumers, but do not necessarily result in economic benefit for insurers.
With little assurance of future funding and with risk corridor self-funding at 13 percent, Fitch warns health insurers incentives for participating in ACA programs could wane further.