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
Aug 18, 2024 - Coverage Denials Often Go Unchallenged
- Fewer than half of people who experienced insurance denials and billing issues fought the decisions, according to a 2024 Commonwealth Fund survey. Many of the survey respondents who didn't contest the denials or billing issues didn’t know they had a right to do so in the first place. People who weren’t aware of their rights to challenge medical bills or coverage denials tended to be younger and have low or moderate incomes.
- Per enrollee gross margins were highest in the Medicare Advantage market in 2023, and medical loss ratios were lowest in the individual insurance market, according to health policy research organization KFF. The largest private health insurance companies often offer plans in multiple markets, including the Medicare Advantage, Medicaid managed care, individual (non-group), and fully insured group (employer) health insurance markets. Private insurers are playing a growing role in public insurance programs, with more than half of eligible Medicare beneficiaries enrolled in a private Medicare Advantage plan and nearly three-quarters of Medicaid enrollees obtaining coverage through a managed care plan (typically a private insurer), according to KFF.
- 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.
- Health and medical insurance carrier industry employment and average wages for nonsupervisory employees increased slightly during the first six months of 2024, according to the US Bureau of Labor Statistics (BLS). Health and medical insurance carriers increased prices slightly during the first six months of 2024, according to the BLS. Health and medical insurance industry sales are forecast to grow at a 6.52% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
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