It appears to be very easy to give speeches and change the law these days. Last minute changes in the law have consequences and the constant Affordable Care Act delays have been bad news for the insurance carriers.

The latest ACA delays - including allowing individuals to remain enrolled in non-ACA-compliant policies for 2014; extending deadlines for 2014 enrollment; and changing the 2015 open enrollment period - are a negative for carriers, and more changes to the law's rollout, which are now expected, will have further negative implications for carriers and eventually premiums. 

First, the administration's backtrack on the cancelled policies are problematic.

This change will likely have a negative effect on the risk profile of the exchange health risk-pool, as individuals can now elect to keep their cheaper plans for another year.  Also, healthy younger members can now delay their purchase until March 31. The additional uncertainty created as state insurance commissioners and insurance companies decide whether or not to offer this option to their insured members has further delayed enrollment in the exchanges.

The 2014 deadline extensions will result in administrative burdens and lost revenue for carriers.

Allowing individuals to wait until March 31 to enroll and avoid a penalty - will result in "insurers losing up to two months of premium on these individuals as a result of the extension," Moody's said. "In addition, it is more likely that younger, healthier individuals will take advantage of this extension, resulting in adverse selection for the first few months of the year."

The recent announcement pushing back the individual coverage enrollment deadline to Dec. 23, from Dec. 15, "will cause insurers various administrative problems because they will have to make sure that these individuals have been coded correctly in their systems in time to receive health care benefits on the first of the year.  If there is a surge in enrollment activity in late December as website issues and other uncertainties are resolved, it will be nearly impossible for insurers to complete the enrollment process in time."

The 2015 open enrollment delay also creates several issues for carriers, including an administrative challenge of enrolling members in time for January 2015.

Also, included in the ACA is a requirement that the premium subsidy clients receive a 90 day grace period, so a subsidy eligible policyholder can pay one month's premium and the policy will remain in force for 120 days.  If the past due premiums are not received within the 90 day grace period, the policy can be cancelled back to the 60th day.  In the meantime, the insurance company must process all claims incurred during the 120 days and hold them for payment until the grace period expires.  If the premium is not received, the providers are not paid for services incurred from the 60th day to the 120th day.  Doctors will be extremely reluctant to treat patients without absolute proof that they will be paid for services.  You can't make this up.

 "In addition, the solution to the administration's disclosure that the back-end payment system intended to transfer government subsidies to insurers has not been built, casts doubt on the government's ability to make timely payments to insurers."

The least discussed but biggest concern for the carriers is that they enroll insured's eligible for coverage Jan. 1, and the subsidy portion of the premium which is a transfer payment from the Treasury to the carriers, does not occur. This week the treasury offered a temporary solution.  They are going to allow the insurance companies to estimate the amount of the subsidy transfer each month and they will send the insurers the money and settle-up at a later date.  Receiving government checks with no consequences is good work if you can get it.

To complicate matters more, the information transfer from the subsidy site to the carrier systems is corrupt, and it is estimated that 30% of individuals purchasing policies on the subsidy site are not being enrolled with the carriers.  The CMS solution is to send the insurance company a manual list of the individuals they show insured and have the insurance companies manually reconcile the list. Hard to believe this is 2013!