Ratings agency Moody’s says for-profit hospitals, drug companies, and medical-device manufacturers would all take negative credit hits if the U.S. Supreme Court strikes down the Affordable Care Act.The agency did not go so far as to say that any companies would be immediately downgraded or placed on negative credit watch, but it said the high court’s action would nonetheless impact firms across the three industries, including HCA, Community Health Systems and Tenet Healthcare.
If the court upholds the Affordable Care Act, costs at pharmaceuticals and device makers like Pfizer and Medtronic would increase, while hospitals benefit on increased patient insurance coverage.
However if the Act is struck down, all three industries will see a long-term hit.
“With fewer people covered by healthcare insurance, for-profit hospitals will face increased bad-debt exposure and reduced reimbursement rates,” the report says. “Pharmaceutical companies would sell fewer drugs and medical-device makers would pay a new excise tax and feel pricing pressure from hospitals.”
The Supreme Court’s decision is expected by the end of June.
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