NEWS: The Hill: Moody’s Downgrades Health Insurers Over Obamacare Uncertainty
Health Law’s Uncertainty And Disastrous Rollout Raises More Concerns About Future of Health Care in America
Upton: “Moody’s latest downgrade is further evidence that the president’s health law is not the right prescription for reform.”
One of the top side effects of the president’s health care law has been the uncertainty it poses for families, business owners, and doctors across the country trying to navigate the law’s costly mandates and the administration’s frequent unilateral delays and changes to the law. Moody’s credit rating agency is the latest to express concern about the impact the law’s uncertainty is having on the U.S. economy. “Moody’s latest downgrade is further evidence that the president’s health law is not the right prescription for reform. Health care should be about providing peace of mind, not generating costly rules and regulations that foster an environment of tremendous uncertainty and confusion,” commented Energy and Commerce Committee Chairman Fred Upton (R-MI).
January 23, 2014
Moody’s Downgrades Health Insurers Over Obamacare Uncertainty
Moody’s announced Thursday it was downgrading its outlook for health insurers from stable to negative based on uncertainty related to ObamaCare.
The credit rating agency cited an unstable environment because of the healthcare law’s difficult rollout, and projected that insurers would earn two percent less than forecast in 2014.
“While we’ve had industry risks from regulatory changes on our radar for a while, the ongoing unstable and evolving environment is a key factor for our outlook change,” Moody’s Senior Vice President Stephen Zaharuk said in a statement. “The past few months have seen new regulations and announcements that impose operational changes well after product and pricing decisions were finalized.”
The Moody’s report also cites the slow enrollment of young people into ObamaCare as a reason for the downgrade.
“Uncertainty over the demographics of those enrolling in individual products through the exchanges is a key factor in Moody’s outlook change,” the ratings agency said.
Citing statistics released by the administration, it noted that so far about 24 percent of enrollees are between the ages of 18 and 34, while a target of 40 percent may be necessary to keep premiums from rising in the future.
It said the 24 percent of young people enrolled so far is “well short” of the 40 percent target.
Moody’s also said it was worried that insurers’ premium calculations may not be enough to cover the industry assessment tax that begins in 2014.
“These changing dynamics will have an uneven effect on insurers, as the impact of these factors will vary by market segment and geography,” it said. “Moody’s view continues to be that the larger and more diversified insurers will be better positioned, both financially and strategically, to meet the challenges facing the sector.”
The Obama administration has implemented a string of unilateral changes and delays to the healthcare law that has drawn complaints from insurers. …
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