Payers are better prepared for a recession now compared to 2008, but persistent inflation could lead to rising premiums and employers dropping coverage, according to an economic report released Aug. 5 by Moody's Investors Service.
Five key takeaways:
- The two largest economic challenges facing payers are slowing economic growth and high inflation, though the impact is likely to be modest.
- Payers that own providers could see higher costs from ongoing labor shortages. The report specifically mentions UnitedHealth Group, Humana and Highmark Health.
- If economic growth continues to slow down and employee layoffs go up, it's expected that healthcare utilization will rise — raising costs on payers as claims increase.
- On the whole, the industry is expected to fare better than the 2008 recession because Medicaid and Medicare Advantage enrollment is much higher now. In addition, payers are more diversified today and typically own more non-insurance assets.
- Inflation that continues beyond two years will present the largest issues for payers because providers would demand higher commercial rates to cover losses under publicly insured individuals. If the government did not increase its rates and providers requested higher commercial rates, small groups could drop their policies due to rising premiums.