In 2018, the health insurance market in North America accounted for more than 33 percent of revenue and is expected to grow through 2026. Image: Shutterstock)

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

According to the latest quarterly report from Moody's, health insurer earnings are still on an upward trend, thanks to membership growth and “efforts to contain medical costs [and] disciplined pricing.”

That upward trend is expected to continue, according to a report from Acumen Research and Consulting, with cancer and other chronic conditions driving spending through additional treatment needs, including surgery. Increasing chronic disease prevalence as well as private insurance plans that provide flexibility in choice of doctors and therapies will also add to the growth of the market, which is expected to hit $1.5 trillion in value by 2026.

Related: Health stocks crumble as fears of Medicare for All snowball

The rise in political risk stemming from multiple presidential candidates advocating for some form of Medicare for All, as well as multiple proposals for such a move being introduced in Congress, “would be credit negative for health insurers, and some could meaningfully limit the role of health insurers,” even though Moody's characterizes it as “highly unlikely in current circumstances.” But that could change with a new political administration, it adds, when “a move in the direction of a single payer system is certainly possible and also likely negative for the sector.”

In 2018, the health insurance market in North America accounted for more than 33 percent of revenue and is expected to grow through 2026. The private sector in the health market alone topped $530 billion, “and is going to be experiencing robust growth,” says Acumen, with a “substantial” compound annual growth rate for hospital insurance by 2025. In addition, the preferred provider organization segment brought in more than $220 billion in 2018 “and will see strong growth over time” because of the low cost of PPO plans.

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

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