Investors, including hedge funds, institutional clients and others, expect four million Americans to enroll in the health insurance exchanges established by the Patient Protection and Affordable Care Act, a figure significantly lower than the Congressional Budget Office's estimate of seven million, according to a Reuters report.
The findings, from a survey of 56 investors conducted by Citigroup, also reveals investors estimate about two million to three million of the new enrollees to be previously uninsured, according to the report. The CBO had estimated four million previously uninsured enrollees, with an additional three million joining the exchanges from employer or individual coverage, according to the report.
The low estimates are rooted in recent delays of certain PPACA provisions as well as suspicions the exchanges may not be fully ready. "All the headlines say the implementation is slower, the software doesn't work, the security isn't there," said Tim Nelson, a healthcare analyst at Nuveen Asset Management, said in the report. "All this tells the average investor that things will be slower to evolve than we might expect."
Les Funtleyder, a healthcare strategist with investment firm Poliwogg, also told Reuters investors are expecting low enrollment in the exchanges. "In general, corporate projections are at the low end, and investors for better or worse are taking the companies at their word," he said. "I have not heard any company with overly optimistic projections about the exchanges."
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