Moody's Downgrades Healthcare Sector, Citing 'Unstable, Evolving' Obamacare Regs

Matt Vespa
By Matt Vespa | January 23, 2014 | 2:06 PM EST

Moody's Investors Service has downgraded the U.S. Health Insurance sector from stable to negative, citing Obamacare as the reason.

"While we've had industry risks from regulatory changes on our radar for a while, the ongoing unstable and evolving environment is a key factor for our outlook change," said Stephen Zaharuk, a Moody's senior vice president and author of the report.

"The past few months have seen new regulations and announcements that impose operational changes well after product and pricing decisions were finalized."

President Obama's unilateral health care "fix" to curb the amount of cancellation notices last November is an example of what's possibly contributing to this "ongoing unstable and evolving environment."  At least, it addressed problems with his now-infamous promise: "if you like your health care plan, you can your health care plan."

Another example of "evolving" regulation is the delay of the employer mandate, which was supposed to go into effect on January 1, 2014.  The White House's decision to unilaterally delay this portion of the law until 2015 has drawn legal challenges - and even then-Washington Post blogger Ezra Klein wasn't too pleased with the president's actions.

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