Mark Farrah Associates produces interesting data on health plans, largely using state insurance department filings. One article looks at profitability trends for various lines of insurance–individual, group, Medicare Advantage and Medicaid. The best way to look at trends is on a per member per month basis, as membership can fluctuate from year-to-year. Individual coverage accounted for 25 million members in 2025. On a pmpm basis, premiums were up 2.5%, but medical expenses rose 12%. So this line of business became much less profitable, probably a money loser for plans. For the insured employer group segment, 41.4 million people were covered in 2025. Pmpm premiums were up 6.6%, but medical expenses rose 8.6%. For Medicare Advantage, 35.7 million covered beneficiaries; pmpm premums rose 11.8%, with medical expenses up 13.6%. Medicaid covers a ridiculous 76.2 million people; pmpm premiums saw a 14.3% increase, while medical exposes grew slightly slower at 13.7%. What this means is that for all lines of business except Medicaid, profitability declined, in some case likely creating losses for insurers. If you want to know why premiums rose so much in 2026 and will again in 2027, this is why. (MFA Report)
The second report looked more broadly at the entire health and accident insurance industry, which includes health insurance, ancillary benefits like dental and disability, specialized medical coverage, and self-funded plans. The loss ratios, or amount of premium dollars that goes to pay claims, was 90% or more for comprehensive group health insurance, government business like Medicaid and Medicare managed care, and self-funded plans. That is hard for insurers to make money on. Ancillary benefits make much more money. Health plans collected over $975 billion in premiums from the government business in 2025. Again, we can infer that medical expenses have been rising faster than premiums and insurers are attempting to reverse that. (MFA Report)
