Health and Medical Insurance Carriers NAICS 524114

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.