Moody's: Hospital, payer margins threatened by 3 public health insurance options

Hospitals and health insurers could have negative credit implications under three public health insurance proposals, according to a research note from Moody's Investors Service. 

For the note, Moody's analysts examined three public health insurance proposals: a limited public insurance option, a more expansive public insurance option and a single-payer healthcare system. 

Hospitals would see margins fall under all three proposals, according to Moody's. For one, hospitals would see lower reimbursement rates compared to what they received from private payers. Plus any increase in service demand or less uncompensated care would likely be outweighed by margin declines under a single-payer system, according to the report.

Health insurers would also see their margins erode under public options because health insurers would face premium and benefits competition with public insurance plans, Moody's said. A single-payer system poses an existential threat to insurers, as it would eliminate most private insurance, according to the report. 

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