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Moody's slams PPACA moves

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Obama administration officials are getting praise for trying to respond to consumer and employer concerns with the latest PPACA delays, but they’re getting attacked on their math.

The U.S. Department of Health and Human Services has addressed complaints that some of the new public exchange plan provider networks are too small by proposing a new work review process.

The Obama administration seems to be considered letting individuals who are happy with old individual policies that fail to comply with Patient Protection and Affordable Care coverage standards keep the policies until the end of 2016. 

Many policyholders were going to have to drop non-PPACA policies that were too new to be grandfathered at the end of 2013. An “administrative fix” now in place lets consumers in many states keep non-PPACA, non-grandfathered policies until later this year

Earlier this week, the Internal Revenue Service and its parent, the U.S. Treasury Department, said employers with 50 to 99 employees or the equivalent can avoid complying with the PPACA “play or pay” coverage mandate until 2016.

Steve Zaharuk, a senior vice president at Moody’s Investors Service, said Obama administration efforts to be responsive could backfire.

The new network rules could please some but drive up medical costs for all, Zaharuk writes in a commentary.

Letting individuals continue to keep non-PPACA policies could jack up provider payment costs for issuers that are struggling to comply with PPACA, and the midsize employer mandate delay could hurt insurers efforts to sell more small-group coverage either in or outside the exchange system, Zaharuk said.

“What was going to be a challenging season for insurers in the small-group market just became more challenging,” Zaharuk said.

Meanwhile, Janet Trautwein, chief executive officer of the National Association of Health Underwriters, said that, as much as NAHU dislikes the employer mandate, the group is pleased to see Treasury officials responding to the views of employers and agents in the employer mandate regulations.

“The final rules reflect positive changes,” Trautwein said.

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