The recent court ruling deeming the ACA unconstitutional will be seriously detrimental for hospitals and health systems if upheld on appeal, two financial ratings agencies agreed.
Fitch Ratings said ACA repeal would be especially harmful to non-profit providers.
"Any reduction in the ACA, either through repeal, piecemeal legislative efforts or legal challenges to its constitutionality, is detrimental for the U.S. not-for-profit healthcare sector, particularly in those states that have or are expanding Medicaid," Fitch Ratings said in a statement.
S&P Global Ratings agreed that while a repeal of the legislation would hurt for-profit hospitals, it would be much worse for their non-profit counterparts.
"Most notably tax-exempt hospitals and healthcare systems — which provide the bulk of U.S. healthcare — will see a broad diminution in credit quality over time in our view as the growth in both bad-debt expenses and charity care costs would directly lower operating margins," S&P said. "For-profit hospital systems will also experience increased uninsured business and therefore higher uncompensated care and margin pressure, but most likely not as bad as tax-exempt hospitals because they typically operate in markets that tend to have a more commercially focused payer mix."