In a new report covering the first six months of 2013, Mark Farrah Associates looks at results among the top seven US health insurers–Aetna, Cigna, HCSC, Humana, Kaiser, UnitedHealth and WellPoint. (Mark Farrah Associates Report) These large insurers cover about 45% of the US population. Profit margins across the plans averaged 5% for this time period, about the same as the year earlier period, but down from an average of 9% in 2008. The range in profit margin was only about 2.1% compared to 4.8% in 2012. Cigna led the way at 6.38%, followed by UnitedHealth at 6.2% with Humana bringing up the rear at 4.29%. Two primary causes of the profit margin drop and narrowing of spread are the new minimum medical loss ratio requirements and a shift from fully-insured to self-insured business. As government business through Medicare and Medicaid grows, and since those lines typically have lower profit opportunities, overall margins also tend to shrink. Overall membership showed healthy gains, from 131.6 million in June 2012 to 143.3 million in June 2013, an 8.8% increase. But much of this growth resulted front the Aetna acquisition of Coventry and the WellPoint acquisition of Amerigroup. Self-insured membership grew faster than insured, adding 6.5 million people compared to 5.2 million full-risk members. Self-insured totals 79.4 million enrollees compared to 63.9 million full-risk ones, but much of the full-risk is in government programs. While all the plans showed gains, much of the gain for several was due to acquisitions. The impact of the health exchanges on many of these large insurers is likely to muted initially, as most of them were very cautious in offering plans on the exchanges. While profit margins have dropped, they are still adequate to allow reinvestment and provide a good shareholder return and these large insures in aggregate continue to gain market share, further concentrating the US health care coverage market.
Results of Major Health Plans
By Kevin RocheNovember 12, 2013Commentary
✅ Subscribe via Email
About this Blog
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].
Healthy Skeptic Podcast
This is an outstanding report on total global drug spending and trends, with projections out to 2025. It helps you understand this important area of health care, which does much...
June 1, 2021
MedPAC 2019 Report to Congress
June 18, 2019
CVS has finalized its $10.6 billion buyout of Oak Street health, which operates primary care centers for Medicare members. People may think CVS is a drug store company, but it...
May 4, 2023
Option Care, a large home health care provider is acquiring Amedisys, another large player in that market, for $3.6 billion, as consolidation ramps up across health care, likely meaning higher...
May 4, 2023
Another example of over-priced companies trying to find some way to survive in the post-epidemic financial world. Transcarent, which does something, somehow to “access high quality, affordable care” is buying...
March 6, 2023
Access ACO Care Management Chronic Disease Comparative Effectiveness Consumer Directed Health Consumers Devices Disease Management Drugs EHRs Elder Care End-of-Life Care FDA Financings Genomics Government Health Care Costs Health Care Quality Health Care Reform Health Insurance Health Insurance Exchange HIT HomeCare Hospital Hospital Readmissions Legislation M&A Malpractice Meaningful Use Medicaid Medical Care Medicare Medicare Advantage Mobile Pay For Performance Pharmaceutical Physicians Providers Regulation Repealing Reform Telehealth Telemedicine Wellness and Prevention Workplace
May 30, 2023
The CV-19 and Vax Lies Continue
Three pieces of misleading research or at least reporting of research indicate why science is…
May 29, 2023
Expect More of This
Minnesota's suicide rate has risen by 40% in twenty years. Democrats have been in charge…
May 29, 2023
Some Quick Climate News
CO2 and temperature have a complex relationship and the Arctic isn't going through unprecendented warmth.