medium · Asset-Backed Securities asset-nuances
In a Healthcare Receivables ABS, what is the primary reason for using a 'Dynamic Advance Rate' against the pool?
- To ensure that the hospital can pay its employees more during a recession
- To account for the fact that health insurance companies pay 100% of billed charges
- Because healthcare receivables have a very long average life of 5 years
- To protect the trust against 'Dilution' from denials and contractual adjustments
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