Health reform's implementation not a bind on credit rating

Credit quality for health insurers remains strong and is expected to stay that way over the next year as the industry moves further into the implementation of healthcare reform, according to a mid-year update from Standard & Poor's Ratings Services.

Despite the “moderate strain” stemming from the changes occurring as a result of the Patient Protection and Affordable Care Act, insurers also have been dealt favorable business conditions, such as new growth and retention opportunities and access to capital.

The industry's risk remains high and there are other potentially negative market factors, such as increasing competition in the individual and small-group segments and funding and growth management of government-sponsored product lines, according to the report.

“But so far, the reforms generally haven't produced the level of operational strain that we had previously thought possible despite the emergence of ACA-oriented rules and regulation changes on relatively short notice,” S&P analysts wrote.

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