Best’s Special Report: US Publicly Traded Health Insurers Sustain Revenue Growth Trend in 2023; Margins Likely to be Pressured in 2024
26 Abril 2024 - 8:48AM
Business Wire
Publicly traded U.S. health insurance companies saw another year
of growth, as total GAAP revenue rose in 2023 by 10.4% to $1.07
trillion. However, according to a new AM Best report, future
results may be pressured as the profitability of government
programs returns to more normal levels.
The new Best’s Special Report, titled, “Revenue Grows but
Margins Are Pressured for US Publicly Traded Health Insurers,”
states that half of the 10 publicly traded health insurers followed
for this report reported double-digit premium growth in 2023, led
by Oscar Health, Inc., at 46.9%; the population in aggregate also
saw a 28.5% increase in investment income. Net income grew to $45.3
billion, a 6.8% increase over 2022, following a 12.5% spike in the
previous year.
“With medical costs continue to rise across the United States,
insurers have been raising premium rates and are likely to continue
doing so in 2024 to maintain favorable earnings,” said Kaitlin
Piasecki, industry research analyst, AM Best.
According to the report, Medicare Advantage (MA) earnings are
being pressured by the decline in reimbursement rates from Centers
for Medicare & Medicaid Services and an increase in medical
claims and utilization. Medicaid managed care business already has
begun to see a drastic decline in enrollment, which could be
accompanied by a worsening of the risk pool as eligibility
redeterminations are completed.
“Overall earnings for companies solely operating government
programs could be challenged in 2024, but these companies should
remain profitable,” said Jason Hopper, associate director, industry
research and analytics, AM Best. “Medical management of those with
chronic conditions, as well as quality programs and related bonus
payments, will be extremely important for sustained earnings for
these health plans. For plans operating in all business segments,
commercial business margins will become a greater focus given the
likely earning declines in Medicare Advantage and Medicaid managed
care.”
To access the full copy of this special report, please visit
http://www3.ambest.com/bestweek/purchase.asp?record_code=342355.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Kaitlin Piasecki Industry Research Analyst +1
908 882 2458 kaitlin.piasecki@ambest.com Jason Hopper
Associate Director, Industry Research & Analytics
+1 908 882 2807 jason.hopper@ambest.com Christopher
Sharkey Associate Director, Public Relations +1 908
882 2310 christopher.sharkey@ambest.com Al Slavin
Senior Public Relations Specialist +1 908 882 2318
al.slavin@ambest.com