indexThe credit rating agency, Moody’s Investors Service, today, lowered the outlook for health insurers from stable to negative, citing “uncertainty” swirling around the rollout of President Obama’s health care law.

The Affordable Care Act was implemented to increase the affordability of health care and expand coverage for individuals without it, plus overall reduce health care costs.

“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 Stephen Zaharuk, a Moody’s Senior Vice President and author of the report. “The past few months have seen new regulations and announcements that impose operational changes well after product and pricing decisions were finalized.”

One of the biggest reasons is the uncertainty over the demographics of those enrolling in healthcare coverage.  The key factor for the Affordable Care to be viable and solvent is the need for those in the age groups of 18-34 to subsidize older and less healthy individuals. 

The other key factor mentioned is the uncertainty over the revolving nature of the regulations of the Affordable Care Act.  Too often the administration changes the rules and also what aspect of the law will be implemented.  This uncertainty causes chaos in the system as health insurers cannot react to the ever changing of this new law.   

Current enrollment has been reported at only 24% of this critical demographic have enrolled.  This is well short of the original 40% target based on the proportion of eligible people in this cohort, says Moody’s.

This is further evidence we need to be asking the question, what happens after the 31st of March when open enrollment is closed and not enough of the target demographic have signed up.  Will the insurance companies be bailed out?

Remember, it’s written into the Affordable Care Act, this is not playing politics; its reality. The question needs to be asked to the Obama administration and to the president himself!  What is your backup plan if not enough of target demographic sign up, what is your Plan B?

The other question which needs to be asked is what is the real cost of the Affordable Care Act?  With all the delays, waivers and exemptions, do we really know the full cost of the implementation of this law?   

We keep reading and listening to the administration tout more people have signed up onto the Medicare and Medicaid programs, but both these programs are barley solvent now.  What impact does it have on the financial stability of these programs when we are adding millions more?

Questions need to be asked and we need to stop politicizing this issue, otherwise we are heading for a “train wreck.”    

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