The possibility that federal regulators could politicize reviews of health insurance rate increase notices could be a financial risk factor for insurers this year, according to analysts at Moody's Investors Service.
The analysts at Moody's, New York, say they will continue to have a negative outlook on the U.S. health insurance sector this year, even though results were better than expected in 2010.
The analysts are predicting that regulatory, political, and economic threats will to lead to lower earnings and low membership growth for health insurers.
Implementation of the Affordable Care Act, the federal health care package that includes the Patient Protection and Affordable Care Act (PPACA), may force health insurers to eliminate some products and leave some markets, and to find ways to generate revenue streams that will not be affected by act requirements, the analysts say.
Republicans in Congress are trying to block implementation of the act, but, if the act takes effect as the Obama administration expects, one provision will give the U.S. Department of Health and Human Services (HHS) responsibility for identifying health insurance rate increase requests that officials believe to be "unreasonable."
