How did publicly traded US health insurers fare in 2023?

How did publicly traded US health insurers fare in 2023? | Insurance Business America

Life & Health

How did publicly traded US health insurers fare in 2023?

What awaits these companies in 2024?

Life & Health

By
Kenneth Araullo

In 2023, publicly traded US health insurance companies continued to experience growth, with total GAAP revenue climbing 10.4% to reach $1.07 trillion, as highlighted in a new report by AM Best.

However, the same report also forecasted potential challenges to future profitability as earnings from government programs begin to normalize.

The report, titled “Revenue Grows but Margins Are Pressured for US Publicly Traded Health Insurers,” noted that half of the 10 insurers analyzed achieved double-digit premium growth last year.

Oscar Health, Inc. led with a 46.9% increase, while the group collectively saw a 28.5% rise in investment income. Overall, net income for these insurers grew to $45.3 billion, marking a 6.8% increase from 2022, which itself had seen a significant 12.5% increase from the previous year.

“With medical costs continuing 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, an industry research analyst at AM Best.

The report also detailed specific pressures on Medicare Advantage earnings, notably due to reduced reimbursement rates from the Centers for Medicare & Medicaid Services and rising medical claims and utilization.

Additionally, the Medicaid managed care sector is beginning to see significant drops in enrollment and potential worsening of the risk pool as eligibility redeterminations conclude.