Healthcare Financial News

President-elect Barack Obama's plan to overhaul the healthcare system, if it comes to pass, would have mixed implications for the healthcare industry, says Moody's Investors Service.

As outlined during the campaign, Mr. Obama's plan would likely benefit healthcare providers due to an increase in customers, but could put downward pressure on the credit profiles of pharmaceutical companies and healthcare insurers, due to cost-cutting measures outlined in the plan, according to the ratings agency.

"If a plan like what President-elect Obama has proposed were to be enacted, more consumers would have access to the healthcare system on an insured basis," says Moody's Costas Chrysostomou, a healthcare analyst with the agency's Corporate Finance Group. "While this is expected to benefit healthcare providers, cost-cutting initiatives proposed to fund the plan pose some challenges for drug companies and insurance providers."

The full Special Comment, titled U.S. Healthcare Industry: Credit Implications of the U.S. Election, is available on www.moodys.com.

Initiatives related to health care were on the ballot in several states for the November 4 elections.

California voters approved the Children’s Hospital Bond Act, which authorizes $980,000,000 in bonds to fund the construction, expansion, renovation, and equipping of children’s hospitals in the state. Children’s health was also on the mind of Montana voters, who approved an initiative enacting the Healthy Montana Kids Plan Act. The Montana act offers health coverage to uninsured children by increasing eligibility for the state’s children's health insurance program and the Montana Medicaid program and by helping families cover their children under employer-sponsored plans.

In Washington state, voters approved the Washington Death with Dignity Act, allowing terminally ill adults with less than six months to live to request and self-administer lethal medication prescribed by a physician. Michigan voters approved the medical use of marijuana.

Still undecided as of Thursday, November 6, was the outcome of a “medical choice” ballot initiative in Arizona, which would prohibit the state legislature from passing a law limiting residents’ choice of private healthcare systems or plans.