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Exchange plan grades may come soon

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Insurance rating agencies could have a good idea of how public exchange plan issuers are doing soon.

Stephen Zaharuk, a senior vice president at Moody’s Investors Service, talks about efforts to track the Patient Protection and Affordable Care Act exchange plans in a new commentary.

Moody’s is expecting insurers to sell much of the new individual and small-group coverage through the PPACA exchanges, in the form of commercial “qualified health plans.”

This year, carriers also will have to come up with a total of $8 billion to pay a new PPACA “assessment.”

Whether carriers have done a good job of building assessment costs into their premiums fairly early in the year, Zaharuk writes.

One question is how well states will help the carriers that run Medicaid managed care plans pay their share of the assessment, Zaharuk says.

Zaharuk expects to have QHP enrollment information soon after the end of the open enrollment period, which run through March 31. 

“An older, less healthy population would imply not only higher medical costs and downward earnings pressure in 2014, but upward pressure for premiums in 2015,” Zaharuk says. “Neither outcome bodes well for a vibrant exchange going forward.”

Eenrollment problems could be harder on the insurers with big QHP programs, Zaharuk says.

Zaharuk also looks at Centers for Medicare & Medicaid Services efforts to hold down funding for Medicare Advantage plans that get low quality ratings.

In spite of the upheaval, early reports suggest that Medicare Advantage enrollment could hold steady or grow a little this year, Zaharuk says.

But, if pressure in 2015 is as severe as in 2014, “it could result in significant premium increases, benefit reductions, or additional market exists,” Zaharuk says.

The Obama administration could go easier on Medicare Advantage issuers in 2015 as a result of election-year political considerations, Zaharuk says.

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