Fitch Ratings projects that nonprofit hospitals will see reduced revenue and patient volumes, as well as a rise in uninsured care, if the ACA is repealed or weakened.
The agency said hits to the ACA would especially affect nonprofit hospitals in states that expanded Medicaid.
"A number of efforts in Congress to repeal the ACA failed over the years, but other changes affecting the ACA more recently have steadily weakened the healthcare insurance program," wrote Kevin Holloran, senior director at Fitch, in a commentary piece published on Fitch's website.
"Taken together in aggregate, these efforts to defund the ACA reduce healthcare coverage and pressure nonprofit hospitals, which provide care to a large proportion of uninsured and Medicaid patients. Of a hospital's revenue sources, self-pay and Medicaid pose the highest risk to revenue sufficiency to recover costs," wrote Mr. Holloran. "The less people that are covered, even by Medicaid, the higher a hospital's exposure to self-pay patients, and the greater stress on its operating margin."
Mr. Holloran cited a court challenge to the constitutionality of the ACA. The 5th Circuit Court of Appeals in New Orleans is considering a case over a judge's decision to strike down the federal health law.
Fitch also noted that President Donald Trump last year expanded the availability of short-term health plans. But since these plans don't have to comply with consumer protections established by the federal health law, the ratings agency said it expects nonprofit hospitals will see more uninsured care due to less coverage under those plans.
Read the full commentary here.
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