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
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Dec 5, 2024 - Most Americans Like Their Health Insurance
                                • Most insured adults (81%) give their health insurance an overall rating of “excellent” or “good,” according to the KFF Survey of Consumer Experiences with Health Insurance. Ratings vary based on health status, however: 84% of people who describe their physical health status as at least “good” rate insurance positively, compared to 68% of people in “fair” or “poor” health. Ratings are positive across insurance types, though higher shares of adults on Medicare rate their insurance positively (91%) and somewhat lower shares of those with Affordable Care Act (ACA) Marketplace coverage give their insurance a positive rating (73%).
                                • 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.
                                • Health and medical insurance carrier industry employment and average wages for nonsupervisory employees increased slightly during the firstnine months of 2024, according to the US Bureau of Labor Statistics (BLS). Health and medical insurance carriers increased prices slightly during the first nine 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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