Health and Medical Insurance Carriers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 950 heath and medical insurance carriers offer financial protection against medical expenses by pooling risks and providing coverage for healthcare services in exchange for premium payments. Most Americans have health insurance coverage through private employer-sponsored plans. Individuals may purchase coverage directly from an insurance company or through federal or state marketplaces. Federal and state governments contract with private insurance carriers to offer Medicare (for adults age 65+ and the disabled) and Medicaid (for low-income and disabled individuals) policies.
Underwriting Risk
Profitability for healthcare insurance companies is directly related to an ability to predict, price for, and effectively manage medical costs.
Highly Regulated
The regulatory environment in the health and medical insurance industry is complex and involves a myriad of federal, state, and local requirements that impact operations and profitability.
Industry size & Structure
The typical health and medical insurance carrier industry employs between 500 and 600 workers and generates more than $1 billion annually.
- The health and medical insurance industry consists of about 950 firms that employ over 530,000 workers and generate over $1.2 trillion annually.
- The industry is highly concentrated; the top 50 companies account for almost 85% of industry revenue.
- Firms that generate more than $100 million annually account for 30.4% of companies and 99.4% of industry revenue.
- Large non-provider-owned carriers include UnitedHealth Group, Humana, CVS Health, Elevance Health, Cigna, and Centene.
Industry Forecast
Health and Medical Insurance Carriers Industry Growth
Recent Developments
Apr 14, 2025 - Health Insurance Industry Annual Revenue Increases
- Health and medical insurance industry sales grew 10% over the year prior to $3.1 billion in 2024, according to the Bureau of Labor Statistics, driven by a boost in enrollment in insurance Marketplaces. Health insurance bought through the Affordable Care Act’s Marketplaces rose 31% in 2024 to cover a total of 21.4 million people. The bump largely comes from customers buying Marketplace coverage after a COVID-era rule requiring states to keep Medicare patients in the exchanges, even if they would have been disenrolled due to eligibility, ended in early 2023. Lower-income customers drove the gains (they were most likely to be disenrolled from Medicaid), with a 54% rise in enrollment among applicants with household incomes between 100% to 150% of the US poverty level. In addition, Medicare Advantage is growing in popularity with 31 million seniors enrolled in the program, helping to boost overall industry revenue.
- The use of AI to screen health insurance claims and potentially deny coverage is coming under increased scrutiny and some US states are responding with new laws to limit its use. Insurance companies are keen to bring costs down using AI in a system where a third of every dollar spent on healthcare goes to administrative costs. Providers, however, are worried that inaccuracies and biases in AI technology will result in erroneous denials. In early 2025 California passed the Physicians Make Decisions Act, which ensures licensed healthcare providers make the final decision on medical treatment instead of AI and technology programs. Similar laws requiring insurance companies to disclose to patients and providers when they are using AI are being considered in Georgia, New York, Oklahoma, and Pennsylvania.
- Medicare payments to Medicare Advantage plans are expected to increase an average of 3.7%, or over $16 billion in 2025, according to the Centers for Medicare & Medicaid Services. Health and medical insurance carriers may benefit from the increase in expenditures. The finalized the Calendar Year 2025 Rate Announcement for Medicare Advantage is projected to result in payments of between $500 and $600 billion in Medicare Advantage payments to private health plans in 2025.
- A small portion of the population is responsible for a very large percentage of total health spending in a given year, according to an analysis of Medical Expenditure Panel Survey (MEPS) data by Health System Tracker. People aged 55 and over accounted for 55% of overall health spending in 2021 despite making up only 31% of the population. People under age 35 made up 44% of the population but were responsible for only 21% of health spending. Average healthcare spending per person for enrollees ages 60-64 in large employer plans was higher than average spending for traditional Medicare beneficiaries ages 65-69.
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