A rating analyst is warning that changes in how federal regulators implement the Patient Protection and Affordable Care Act could negatively impact the accuracy of health insurers’ pricing models.
Steve Zaharuk, a senior vice president at Moody’s Investors Service, wrote about the possible effects of the changes in a new credit outlook commentary.
The commentary comes in light of the U.S. Treasury Department’s PPACA employer mandate delay and a move by the U.S. Department of Health and Human Services to loosen exchange income eligibility requirements for a year.
By delaying implementation of the employer mandate, the Obama administration could increase the number of individuals who will be shopping for health coverage through the new exchange system, Zaharuk wrote in the Moody’s commentary.
“In addition, some price-sensitive individuals will now have an easier time qualifying for government subsidies,” Zaharuk wrote.
The changes could increase individual health policy sales, but, for insurers, the problem is that they have priced their products based on the assumption that PPACA will be fully implemented.
If the government puts off implementing some parts of PPACA, the actual demographics of individual market coverage applicants could be different what the insurers had expected, Zaharuk said.