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HHS removes ACA funding plan from budget; new buyers to enter insurance market

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COVID-19 Impact & Recovery: Financial Industry Outlook for H2 2021


HHS removes ACA funding plan from budget; new buyers to enter insurance market

The Department of Health and Human Services deleted a $11.5 billion budget request for the Affordable Care Act's risk corridor program funding after unpaid insurers suing the government claimed it strengthened their cases, Modern Healthcare reported. HHS after revising the budget and removing the item, said it was an accounting error. Moda Health Plan Inc. attorney said the step was taken "to reflect the government's litigation position in this case." Over three dozen insurers have sued the government over unpaid risk-corridor payments.

The Center for American Progress, or CAP, a Washington think tank, has unveiled the latest alternative to the U.S. government's currently run healthcare programs — proposing a structure that would guarantee universal coverage, but also would allow employer-based insurance. It also would offer participants certain services and therapies for free, like preventive care, treatment for chronic diseases and generic drugs. "Healthcare is a right," CAP stated.

Individuals earning $500,000 or more and couples with income of $750,000 or more will need to pay 85% of the cost of their Medicare parts B and D benefits from 2019. Currently, they pay 80% of the costs.

Over in Idaho, a committee agreed to advance a bill, which allows health insurers from other states to sell their plans in the state, to the Senate floor, the Associated Press reported.

A Florida Senate committee approved a bill that would remove a provision from the state's workers compensation law that allowed employers to deny benefits to injured workers, who presented false information to get jobs, Business Insurance reported.

Kentucky's House of Representatives passed a bill that would amend a dozen statutes in the state's code governing the workers' compensation system, Business Insurance reported.

Bank of America Corp. said in its annual filing that it is still working through five separate lawsuits with financial guarantor Ambac Assurance Corp. The lawsuits concern bond insurance policies provided by Ambac on some securitized pools with loans that Ambac alleges were misrepresented by Bank of America.

An Enstar Group Ltd. subsidiary agreed to reinsure the New South Wales motor vehicle compulsory third-party insurance business of Zurich Insurance Group AG's Australian subsidiary, effective Jan. 1.

Insurance industry representatives urged state regulators to extend the benefits of the recent bilateral insurance pact between the European Union and the U.S. to other countries that meet high solvency standards — garnering recognition for the U.S. system and its industry in the process.

More players are expected to get involved in M&A activities within the U.S. insurance space in 2018, according to Deloitte's insurance M&A outlook report. The space is experiencing the emergence of new buyer types, with sovereign wealth funds, pension funds, closed-block specialists and special purchase acquisition companies seen as highly competitive buyers because of their lower cost of capital.

Click here to read a summary of earnings reported Feb. 22 by select insurance companies covered by S&P Global Market Intelligence.

Featured news

EMA endorses Pfizer's leukemia drug; UK health chief to tackle medication errors: The European Medicines Agency recommended the approval of five new therapies this month, including Pfizer Inc. 's Mylotarg, intended to treat acute myeloid leukemia, a cancer of the blood and bone marrow. Meanwhile, the regulator's Committee for Medicinal Products for Human Use adopted a negative opinion for Puma Biotechnology Inc.'s Nerlynx which was expected to be used as a breast cancer treatment.

Financial news in other parts of the world

Asia-Pacific: Japan to check regional banks' defenses; Paytm registers 2 insurance units

Europe: Standard Life Aberdeen, Phoenix in £3.24B deal; RBS posts 1st FY profit in years

Middle East & Africa: Bahraini bank eyes Saudi, UAE expansion; Kenyan banks urged to rethink plans

Latin America: Caixa launches new redundancy scheme; Moody's revises Colombia's outlook

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng increased 0.98% to 31,268.15, and the Nikkei 225 inched up 0.72% to 21,892.78.

In Europe, around midday, the FTSE 100 was down 0.19% to 7,238.52, and the Euronext 100 slipped 0.17% to 1,022.25.

On the macro front

The 2-Yr FRN Note Settlement and the Baker-Hughes Rig Count report are due out today.