The calamity of ObamaCare has caused even more distress for health insurers as a report from Moody’s, the credit rating agency, downgraded its position from stable to negative Thursday.
“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,” said Moody’s Senior Vice President Stephen Zaharuk in his statement today.
Indicating the 2014 forecast for insurance industry earnings would be at least 2 percent less, Zaharuk stated “the past few months have seen new regulations and announcements that impose operational changes well after product and pricing decisions were finalized.”
The Hill a publication of Congress, first reported the downgrade.
A major cause for this damaging downgrade is due to the sluggish enrollment of young Americans into Obamacare, the Moody's report sited.
“Uncertainty over the demographics of those enrolling in individual products through the exchanges is a key factor in Moody’s outlook change,” the Moody’s report explained.
ObamaCare was sold to the American people by President Barack Obama and the Democratic led Congress with a needed prerequisite of 40 percent of the enrollees being between the ages of 18 and 34, while at the same time allowing most 18-24 year-olds to have their coverage included with their parent’s plans.
The federal government’s own figures show less than 24 percent of enrollees are under age 35.
Other concerns in the report included grave concern that insurers’ premium calculations would most likely not be sufficient to cover the new assessment tax for this year.
“These changing dynamics will have an uneven effect on insurers, as the impact of these factors will vary by market segment and geography,” the report stated. “Moody’s view continues to be that the larger and more diversified insurers will be better positioned, both financially and strategically, to meet the challenges facing the sector.”