The U.S. healthcare industry and health insurance market are becoming increasingly volatile due to rising drug costs and growing cyber threats, according to a report by S&P Global Ratings.
Analysts gathering in New York this week for ratings agency S&P’s latest insurance conference said they had a stable outlook for the overall U.S. health insurance market.
They see private group health insurance as especially stable, free from the government funding pressures that have shaken up Medicare plans and changes in eligibility rules that affect enrollment in Medicaid plans.
According to Francesca Mannarino, global associate director at S&P, when S&P speaks to insurers about its commercial group sector, a common topic of conversation is the high cost of covering new GLP-1 drugs to treat obesity.
Mannarino said insurance companies are also talking about increased use of behavioral health services.
Medicare plan issuers are reporting a surge in utilization of health care services across the board, and the commercial group sector is seeing reports of increased utilization of community plans in some parts of the country but not others, Mannarino said.
Expanding digital risks
S&P released its U.S. health insurance market outlook report for 2024 at the end of January. One concern that wasn’t included in the list of key risks for both the overall market and the commercial entity sector was ransomware attacks and other cyberattacks.
Less than a month later, hackers broke into the systems of UnitedHealth’s medical data services subsidiary, Charge Healthcare, disrupting health care delivery and claims processing in the United States.
“The cyber risk has become very apparent,” Mannarino said. “We continue to monitor it.”
But for now, S&P is treating cyber risk through its relationship to other factors, such as earnings, that analysts consider, she said.
