Pie chart with dollar image In2018, the health insurance market in North America accounted formore than 33 percent of revenue and is expected to grow through2026. Image: Shutterstock)

|

The health insurance market is pretty risky these days. Thereare the political and legal issues stemming from growth in thepopularity of Medicare for All and the eventual fate of theAffordable Care Act, not to mention the usual mergers andacquisitions. Still, membership growth is expected,stemming from increased spending on health care.

|

According to the latest quarterly report from Moody's, healthinsurer earnings are still on an upward trend, thanks to membershipgrowth and “efforts to contain medical costs [and] disciplinedpricing.”

|

That upward trend is expected to continue, according to areport from Acumen Research and Consulting,with cancer and other chronic conditions driving spending throughadditional treatment needs, including surgery. Increasing chronicdisease prevalence as well as private insurance plans that provideflexibility in choice of doctors and therapies will also add to thegrowth of the market, which is expected to hit $1.5 trillion invalue by 2026.

|

Related: Health stocks crumble as fears of Medicare for Allsnowball

|

The rise in political risk stemming from multiple presidentialcandidates advocating for some form of Medicare for All, as well asmultiple proposals for such a move being introduced in Congress,“would be credit negative for health insurers, and some couldmeaningfully limit the role of health insurers,” even thoughMoody's characterizes it as “highly unlikely in currentcircumstances.” But that could change with a new politicaladministration, it adds, when “a move in the direction of a singlepayer system is certainly possible and also likely negative for thesector.”

|

In 2018, the health insurance market in North America accountedfor more than 33 percent of revenue and is expected to grow through2026. The private sector in the health market alone topped $530billion, “and is going to be experiencing robust growth,” saysAcumen, with a “substantial” compound annual growth rate forhospital insurance by 2025. In addition, the preferred providerorganization segment brought in more than $220 billion in 2018 “andwill see strong growth over time” because of the low cost of PPOplans.

|

Then there's the chronic illness that characterizes the segmentof senior citizens, with its attendant costs. The geriatric segmentof the health insurance market, it adds, will grow by about 2percent during the forecast period.

|

Read more: 

 

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Marlene Satter

Marlene Y. Satter has worked in and written about the financial industry for decades.