Last week’s move allowing consumers another two years to keep non-PPACA compliant plans was, according to the administration, a good one that provides greater flexibility for everyone.
But it could be bad news for carriers.
In a new brief out Monday, Moody’s said the extension is credit negative for carriers because it “adds more uncertainty about the risk profile of the pool of individuals purchasing insurance on the health care exchanges and delays stabilization of the policy.”
“We expect that the insurance risk pools under the exchanges will not improve and may deteriorate,” report author Steve Zaharuk, Moody’s senior vice president, wrote.
Last Wednesday, the Obama administration announced consumers can keep their non-compliant health plans until Oct. 1, 2016. That announcement followed November’s original extension through 2014, which came after backlash over President Obama’s broken campaign promise that if patients “liked their insurance plans they could keep them.”
Moody’s said with the latest extension they expect pools to become riskier, as healthy individuals who maintained noncompliant health insurance policies before the PPACA’s implementation likely will retain their policies, pushing older and sicker individuals into the exchanges.