Moody’s worried about carriers’ future

Moody’s Investor Service is not a fan of the administration’s postponement of key elements of the Patient Protection and Affordable Care Act.

Moody’s has issued a “sector comment” pertinent to U.S. insurance providers that paints a dim portrait of the carriers’ abilities to offer affordable health insurance in the wake of the latest extension allowance by the administration.

President Obama recently announced that consumers can renew their current health coverage even if that coverage doesn’t meet the criteria established by the law.

Related story: PPACA woes become credibility fight

This will offer millions of Americans an excuse not to buy coverage through the state exchanges, Moody’s noted. Combined with the already low sign-up rate on the exchanges — especially among the critical millennial generation — Moody’s is skeptical that carriers are going to be able to cover the cost of offering the subsidized plans to the millions who are expected to apply for it.

“The President’s administrative fix compounds the risk of insufficient enrollments in the ACA’s health insurance plans to provide insurers with sufficient premiums to cover their costs,” Moody’s said. “Additionally, according to the Department of Health and Human Services, enrollment on the exchanges thus far is much lower than government projections, a credit negative for participating health insurers.”