Pennsylvania's decision to opt in to Medicaid expansion is a credit positive for hospitals in the state, according to Wells Fargo Securities.
The Keystone State became the 27th state to join the program under the Affordable Care Act when the Obama administration on Aug. 28 approved Gov. Tom Corbett’s alternative plan that will use federal money to pay private insurers to provide health care to uninsured individuals.
“The plan’s approval is another positive sign of [the U.S. Department of Health and Human Services’] flexible stance to encourage more states to expand coverage, in our view,” Wells Fargo senior analyst George Huang wrote in a Sept. 8 commentary.
Pennsylvania plans to use an Arkansas premium support type-model starting on Jan. 1, but election results could affect the timing. Corbett, a one-term Republican, trails Democratic challenger Tom Wolf 56% to 25% with nearly 20% undecided, according to last month’s Robert Morris University poll.
“We believe this development is also a credit positive for hospitals in the state, even if Gov. Corbett loses the upcoming gubernatorial election,” wrote Huang. Wolf, a York businessman, supports straight expansion without such premium contribution conditions.
According to Wells Fargo, Indiana, Missouri, Tennessee, Utah and Virginia are considering expansion using premium support models.
Moody’s Investors Service rates Pennsylvania’s general obligation bonds Aa3. Fitch Ratings and Standard & poor’s rate them AA.
