Health Care Law's Shifting Deadlines Worry Credit Agency

By Abby D. Phillip December 2, 2013

(Jon Elswick/AP Photo)

Moody's, an agency that rates business' credit worthiness, warned today that the Obama administration's constantly changing rules and deadlines for the Affordable Care Act could negatively impact business for health insurance companies.

In the last few weeks, the Obama administration has changed the rules to let people keep their existing health insurance longer, delayed the open enrollment period for 2015 by one month, and extended the 2013 deadline for when individuals would have to enroll in order have health insurance by Jan. 1, 2014.

All of those, Moody's warned in their bi-weekly credit outlook statement today, are "credit negative" for health insurance companies and could "expose the sector to additional financial and operational risks."

Steve Zaharuk, senior vice president of the U.S. Insurance team for Moody's, told ABC News that over the next year, the uncertainty posed by last minute changes from the Obama administration could expose insurance companies to higher administrative costs and uncertainty about the effects of the changes on the composition of healthy and sick people they insure.

"There are a lot of risks and uncertainty for the Affordable Care Act at the moment," Zaharuk said. "Insurance companies can deal with risk if they know the playing field. But when you keep changing the rules and adding more uncertainty into situation then it becomes even more risky and more difficult to deal with."

Zaharuk also warned that two changes could be significant for insurance companies if the Obama administration decides to go forward with them, as some in Congress have advocated: delaying the individual mandate or extending the open enrollment period beyond March 31, 2014.

"At that point, insurance companies might want to reassess their position in the exchanges and possibly even lobby to have the premium rates changed," Zaharuk said. "We'd consider those very significant rule changes."

Given that the Obama administration announced this weekend that they've met their goal of fixing the website for a "vast majority" of users, and the revelation that in November, enrollment numbers for the federal website jumped sharply, things appear to be looking up for Healthcare.gov.

But in the credit rating agency's estimation, the claims about the website's ability to handle enrollment demand remains "untested." And the website's ability to convey accurate information to insurers about enrollees, their premiums and subsidies, remains a huge question hanging over the insurance companies' balance sheets.

"We are so close to the end of the enrollment period and given holiday distractions like Cyber Monday, people may put-off registering on Healthcare.gov, causing a bottle-neck towards the end of the year," Zaharuk said. "This wave of applications may cause additional technology headaches."