There were many contributing factors to this rating, one of which was the health care reform.
According to one of the latest reports issued by Moody’s, the credit outlook for the health insurance industry’s companies has been downgraded from having been “stable” to what is now seen as “negative”.
Among the primary contributors to this change is due to the number of unknown factors this year.
Though there was no single factor that led to the downgrading of the health insurance industry’s credit outlook, the health care reform has played an important role. According to the senior vice president covering this industry at Moody’s, Stephen Zaharuk, when the rating was being determined, it began with an examination of the impact of the Affordable Care Act, as it is a new and very large element in the mix.
The rollout of the law changed the way that predictions about the health insurance industry could be conducted.
Moody’s observed that the rollout of the health care reform was not as great as it was expected to be. Moreover, the enrollment numbers that had been predicted are not showing up as the reality, based on the pricing assumptions of the insurers. There are also a number of additional issues that haven’t been making insurance news headlines but that have each been making their own impact behind the scene.
The primary concern, according to Zaharuk, is whether or not the insurers will actually be paid the premiums that they require when they sell through the federal or state exchanges. Another point that was pointed out by Zaharuk is that there have been a number of changes to regulations as a result of the rollout. Enrolment dates were changed and extended and consumers were allowed to keep plans that do not comply with the law for another year.
Though each of those elements on their own is not enough to create a great deal of worry in the health insurance industry, when they are all brought together, they create a higher level of risk about their own impact and about what will happen if there is more in the future.