The credit rating agency cited an unstable environment because of the healthcare law’s difficult rollout, and projected that insurers would earn 2 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 might not be enough to cover the industry assessment tax that begins in 2014. ...
Full story: http://thehill.com/blogs/healthwatch/health-reform-implementation/196203-moodys-downgrades-health-insurers-over#ixzz2rFMH23o7
