After an uncertain beginning, Moody’s is ready to once again embrace the future of health insurance carriers.
A newly revised outlook for the health insurance industry suggests that carriers have successfully adapted to the landscape newly altered by the Affordable Care Act, leading to an adjustment from “negative to stable.”
Specifically, the ratings agency cited a 9% plus growth by health insurers in Medicare Advantage “despite cuts in government reimbursements to insurers” as well as higher out-of-pocket costs for patients and the lower utilization of medical services driven by greater managed care oversight.
Moody’s said it will keep an eye out for developments in the market, but anticipates mostly smooth sailing ahead.
“Our revised outlook on the US health insurance sector reflects the insurers’ ability to adapt to healthcare reform,” said Moody’s Senior Vice President Stephen Zaharuk. “While ongoing legal and political uncertainties remain, we believe that insurers will continue to minimize these risks over the next 12 to 18 months.”
One area Moody’s is concerned with is the upcoming decision on
King v. Burwell, in which the US Supreme Court will either strike down or uphold the federal government’s ability to extend healthcare subsidies to residents in states utilizing the federal exchange.
“In addition, the affordability of health insurance will be an ongoing concern,” the agency said. “Premiums continue to increase, as are out-of-pocket costs because of higher deductibles and co-pays.
“While insurers are working to curb costs with risk-sharing contracts with providers and other tools, the long-term impact of their efforts is uncertain.”
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