You'll recall that Standard & Poors downgraded the US government's credit rating for the first time in history during Barack Obama's first term -- a decision for which they were reportedly threatened by the administration. Now another ratings agency is slapping the health insurance industry with a fresh downgrade -- and the cause-and-effect calculus isn't ambiguous:
Credit ratings firm Moody's Investors Service on Thursday lowered its outlook for health insurers to "negative" from "stable," citing "uncertainty" swirling around the rollout of President Obama's health care law. In a new report, the agency said that the outlook for insurance companies is no longer clear because the law's insurance exchanges haven't been attracting enough younger individuals. In addition, Moody's analysts were concerned that the Obama administration has been changing regulations after insurers had already set prices for the year..."The past few months have seen new regulations and announcements that impose operational changes well after product and pricing decisions were finalized." The release noted, "Uncertainty over the demographics of those enrolling in individual products through the exchanges is a key factor in Moody's outlook change. ... Enrollment statistics show that only 24 percent of enrollees so far are between 18 and 34, a critical age group in ensuring that lower claim costs subsidize the higher claim costs of less healthy, older individuals. This is well short of the original 40 percent target based on the proportion of eligible people in this cohort."
The White House may believe that imposing desperate, on-the-fly extensions and political "tweaks" to existing policy can somehow occur in a vacuum, but that's not how markets work. It also appears as though the number crunchers at Moody's aren't buying the administration's risible goalpost shifting on demographics either. In the real world, failures and incompetence have consequences. Many major insurers hopped aboard the Obamacare train after it left the station, having been promised millions of new customers for cooperating with the big government project. These companies have been discovering the perils of doing business with Democrats ever since, and today's outlook-negative downgrades are only the latest blow. Megan McArdle -- who has been a trenchant, wonky observer of Obamacare since its passage -- sees more upheaval and political machinations on the horizon, too. She declares the entire enterprise "beyond rescue:"
By “beyond rescue,” I mean that the original vision of the law will not be fulfilled -- the cost-controlling, delivery-system-improving, health-enhancing, deficit-reducing, highly popular, tightly integrated (and smoothly functioning) system for ensuring that everyone who wants coverage can get it...Many of the commentators I’ve read seem to think that the worst is over, as far as unpopular surprises. In fact, the worst is yet to come. Here’s what’s ahead: (1) 2014: Small-business policy cancellations. This year, the small-business market is going to get hit with the policy cancellations that roiled the individual market last year. Some firms will get better deals, but others will find that their coverage is being canceled in favor of more expensive policies that don’t cover as many of the doctors or procedures that they want. This is going to be a rolling problem throughout the year. (2) Summer 2014: [Bailout] Insurers get a sizable chunk of money from the government to cover any excess losses. When the costs are published, this is going to be wildly unpopular: The administration has spent three years saying that Obamacare was the antidote to abuses by Big, Bad Insurance Companies, and suddenly it’s a mechanism to funnel taxpayer money to them? (3) Fall 2014: New premiums are announced.
Click through for her list of coming attractions in 2015 and beyond. The three political emergencies for Democrats listed in the excerpt above will renew public outrage, which could very well trigger an additional round of last-minute "adjustments" by the White House to temporarily pull Democrats' chestnuts out of the fire. Those maneuvers aren't likely to work politically, but they will definitely fuel the culture of uncertainty and confusion on which Moody's new analysis is based. Insurance companies aren't the only victims of the chaos and unpleasant changes. These disruptions are hitting families and businesses, too. Here's a disabled mother who signed up for Obamacare and has gotten the run-around ever since:
And meet "hundreds" of Ohioans who've just discovered that they won't be allowed to keep their doctor after all:
Hundreds of people in the Mahoning Valley can no longer go to their trusted doctors, and local officials say the Affordable Care Act is to blame. Doctors from the Mahoning County Medical Association sat down with US Representative Bill Johnson in Canfield Tuesday to discuss their concerns with UnitedHealthcare's decision to drop local doctors, including the Eye Care Associates practice in Beaver Township, from their Medicare Advantage plans. That means patients either have to change doctors or pay out of their own pockets. “Now they are facing the choice of switching to another doctor. They are really scared, really scared,” said Dr. H.S. Wang, Eye Care Associates, Beaver Township. Dr. Sean McGrath, president of the Mahoning County Medical Society, said UnitedHealthcare made similar changes once before, knocking one of the area's primary urology groups off the Medicare Advantage network. This makes costs higher and care worse for patients.
As I predicted when Politifact awarded Democrats its "lie of the year" designation for their false "keep your plan" pledge, that broken promise's sister lie was also likely to impact millions of people this 2014. Team Obama has been forced to change its tune from "if you like your doctor, you can keep your doctor -- period" to "you may be able to keep your doctor, and it might cost more." Obamacare's popularity remains deep underwater in the latest national Q-poll. A 56 percent majority disapproves of the law, while just 38 percent are supportive.