Insurers will see major financial losses now that the Obama administration has delayed several aspects of the reform law, including postponing canceled plans, extending enrollment deadlines and pushing back the small business exchange, according to Moody's.
The problem, the investor service company says, is that these last-minute fixes could have a negative impact on the risk pool for insurers selling plans on the health insurance exchanges. For example, the enrollment deadline extensions mean insurers will lose up to two months of premiums from healthy consumers while increasing their adverse risk pool, Insurance Business America reported.
These delays expose the insurance industry to "financial and operational risks," including higher administration costs and uncertainty about how the changes will affect the ratio of healthy and sick consumers, LifeHealthPro reported.
"There are a lot of risks and uncertainty for the Affordable Care Act at the moment," Steve Zaharuk, senior vice president of the U.S. Insurance team for Moody's, told ABC News. "Insurance companies can deal with risk if they know the playing field. But when you keep changing the rules and adding more uncertainty into a situation, then it becomes even more risky and more difficult to deal with."
Zaharuk added that if the Obama administration decides to delay the individual mandate or extend the exchange open enrollment period beyond March, the situation could worsen for insurers. "At that point, insurance companies might want to reassess their position in the exchanges and possibly even lobby to have the premium rates changed," he said. "We'd consider those very significant rule changes."
The future isn't all gloom and doom for insurers, though. Humana CEO Bruce Broussard, for example, believes that the exchanges present significant opportunities, including financial benefits, in the long-term, FieceHealthPayer previously reported. Similarly, WellPoint CEO Joseph Swedish has said the company is "optimistic about the long-term membership growth opportunities on the exchanges."