A plethora of regulatory
change combined with political and economic factors are working
together to create an uncertain environment for US health
insurers.
This warning comes from
rating agency Moody’s Investor Services’ senior vice-president
Stephen Zaharuk.
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“Despite better-than-expected
results in 2010, US health insurers will face considerable
challenges over the next 12 to 18 months,” said Zaharuk.
He continued that provisions
of the Patient Protection and Affordable Care Act (PPACA) that
become effective in 2011 include the minimum medical loss ratio
(MLR) regulations and changes to Medicare Advantage
reimbursement.
“The MLR regulations will, in
effect, limit profitability in the individual and group insured
segments, and changes to Medicare reimbursement could reduce both
margins and membership,” he warned.
According to health-focused
non-profit organisation the Kaiser Family Foundation, 21 provisions
of the PPACA will go into effect in 2011.
Zaharuk also noted that
health insurers’ membership is likely to suffer from layoffs in the
public sector, as well as languishing job growth in the commercial
sector.
He added that because of
rising health care costs, increased premiums are forcing more
individuals and employers to forgo insurance.
