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January 23, 2014 at 10:42 AM
The uncertainty over the Patient Protection and Affordable Care Act is taking a heavy toll on carriers.
Moody’s Investor Services announced Thursday it was lowering the insurance sector’s outlook from stable to negative based on uncertainty over the law.
“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,” Stephen Zaharuk, report author and Moody’s senior vice president 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.”
See related: Analyst shrugs off exchange bumps
In addition to the law’s rocky rollout, the administration has announced a series of delays of PPACA components, moves that have frequently angered carriers.
Moody’s cited the slow enrollment of young people as one reason for the outlook change. The administration has said just a quarter of enrollees so far are 18-34, a critical demographic to ensure lower claim costs subsidize less healthy, older individuals.
