The credit strength of for-profit hospitals will fare best if the U.S. Supreme Court upholds the healthcare reform law, rather than striking down some or all of the law, according to Moody's Investors Service. But pharmaceutical and medical-device companies would likely benefit most if the Supreme Court throws out the entire Patient Protection and Affordable Care Act.
In a newly released report, Moody's analysts said for-profit hospitals would benefit from an influx of insured patients and fewer unpaid medical bills should the law survive its legal challenge intact. A decision from the Supreme Court is expected this month.
Meanwhile, pharmaceutical companies would benefit most if the court jettisoned the entire law, which includes higher Medicaid rebates, discounts for seniors and a new fee, which is projected to cost the industry $85 million over 10 years. Moody's analysts said lawmakers or regulators may revive some of those provisions if the law fails, but the new fee would likely be scrapped if the court strikes down the law. Medical-device makers would benefit under such a scenario because it would end a new tax under the law.