"The way the exchange products are structured and priced, a sizable portion of these healthy individuals must enroll so their lower claim costs can subsidize the higher anticipated claim costs of less healthy individuals."
Moody's said health insurers mandated to provide coverage for a risk pool that is skewed towards older and less-healthy people would see higher medical costs and reduced earnings in 2014, and would find themselves pressed to raise premiums in 2015. "Neither outcome bodes well for a vibrant insurance exchange, which insurers had been counting on for increased revenues and income," Moody's said.
The bond rating agency noted that WellPoint, Inc. (Baa2 stable) and Health Net, Inc. (Ba3 positive), are particularly exposed to potential losses because they have aggressively taken part in the exchanges.
HHS officials said there is still plenty of time for young adults to sign up for coverage before the enrollment period ends on March 31.
A new marketing effort was launched this month to encourage younger people to enroll. And Obama Administration officials noted that Massachusetts saw similar enrollment patterns with younger people when that state mandated universal coverage several years ago.