Health care is almost 20% of the US economy. Paying for that health care is a very large industry. Mark Farrah Associates regularly produces analyses of the state of that industry. A recent one examines state insurance filings to determine size and likely profitability of various segments. For 2024 nearly $1.4 trillion in premium and self-funded plan fee revenue was reported through these filings. According to this data, government programs, largely Medicare and Medicaid, account for 112 million enrollees and $837 billion in premium, up 8% from the prior year. Comprehensive health insurance plans cover about 118 million people, with $640 billion in premium. Government and comprehensive private plans have similar ratios of the amount of premium spent on actual medical claims, and given that administrative costs don’t increase at the same rate as premiums, these plans have become more profitable over time. Various kinds of supplemental health insurance, like disability coverage, tend to spend less of the premium on medical costs, and therefore be much more profitable. (MF Article)
