2024 Health Insurance Segment Profitability
August 21, 2025
In this brief, Mark Farrah Associates (MFA) compared year-over-year profitability for the Individual, Employer-Group, Medicare Advantage, and managed Medicaid health insurance segments. Financial insights were gleaned from aggregated 2023 and 2024 National Association of Insurance Commissioners (NAIC) statutory financial data from MFA’s Health Coverage Portal™.
Individual Segment Performance
According to financial statements filed by insurers and estimated by Mark Farrah Associates, enrollment in Individual medical plans totaled approximately 25.4 million, as of December 2024, as compared to 21.3 million at the end of 2023. This gain of over 4 million members builds on the nearly 3.7 million members of growth experienced between 2022 and 2023.
For 2024, premiums earned increased 28.7% while health care services (medical expenses) incurred grew 28.9% since 2023. On a per member per month (PMPM) basis, which accounts for changes in membership and reporting plans, premiums increased 1.7%, while medical expenses grew 1.9%. The average medical expense ratio for the individual segment was 85.3%, as compared to 85.2% the previous year.
Amongst the top plans, Centene reported the lowest medical expense ratio with 77.1%. Centene was also the only top plan that reported a lower ratio for 2024. UnitedHealth, reported the second lowest medical expense ratio amongst the top plans, with 79.9% for 2024 after more than doubling their enrollment in the segment from 2023. CVS experienced increased medical expenses, which greatly outpaced premium growth, driving their medical expense ratio up to 94.9%.
Employer-Group Segment Performance
Health insurance companies in the Employer-Group risk segment reported approximately 43.2 million members, as of December 31, 2024, down 3.4% from 2023. For health insurers with Employer-Group business, profitability decreased for 2024. In 2024, premiums earned increased 2.6%, and medical expenses increased 3.5% as compared to 2023. On a PMPM basis, premiums earned increased 7.3% over 2023, while medical expenses grew by 8.2%. The growth in medical expenses, which more than offset the increase in premiums, pushed the average medical expense ratio for this segment up to 88% for 2024, from 87.2% in 2023.
Kaiser experienced the only decrease in its medical expense ratio between 2023 and 2024, dropping 89.1% due to a 9.4% increase in premiums PMPM. BCBS of Michigan’s 3.4%-point increase in its medical expense ratio resulted from premiums PMPM not keeping pace with medical expense growth, leading to a 90.1% medical expense ratio.
Medicare Advantage Performance
The Medicare Advantage (MA) segment continues to rapidly grow. According to the Centers for Medicare and Medicaid Services (CMS), Medicare Advantage enrollment reports aggregated by MFA in Medicare Business Online™, total Medicare Advantage plan enrollment was approximately 34.6 million; a growth of over 1.9 million members since 2023. Year-over-year profitability for this segment, similar to the Group segment, has decreased. For 2024, premiums earned increased 10.1% while medical expenses increased 13.1% from 2023. On a PMPM basis, premiums earned have increased 4.3% from 2023, while medical expenses grew by 7.2%. The growth in medical expenses, which was greater than the increase in premiums, pushed the average medical expense ratio for this segment up to 89.6% for 2024, from 87.2% in 2023.
Turning our attention to the segment leaders, all plans reported increases in their medical expense ratios for 2024. CVS reported a 17.3% increase in medical expenses PMPM, the highest growth amongst the segment leaders. The large increase in CVS’ expenses was not offset by the 7.6% increase in premiums PMPM which led to a larger increase in its medical expense ratio. Elevance reported the smallest increase in the medical expense ratio amongst the leading plans after experiencing the lowest increase in medical expenses PMPM.
Managed Medicaid Performance
December 2024 Medicaid and CHIP membership was 79.1 million members, according to CMS, which is down approximately 6.6 million members from December 2023. For 2024, premiums earned increased 1.5% while medical expenses incurred increased 5.4% from 2023. On a PMPM basis, premiums earned increased 15.4% over 2023, while medical expenses increased 19.8%. The increase in premiums did not offset the increase in medical expenses PMPM, pushing the medical expense ratio up to 91.3% in 2024.
With rising medical expenses, the segment average medical expense ratio for Medicaid increased year-over-year. All the segment leaders reported financial results leading to increased ratios. UnitedHealth experienced the largest change in their medical expense ratio, growing from 85.7% in 2023 to 89.2% in 2024. This increase was due to a 20.2% increase in medical expenses PMPM which was not covered by premium gains. While Independence Blue Cross reported the smallest increase in their medical expense ratio for 2024, their ratio remains well above the segment average.
Conclusion
For 2024, the Individual segment experienced continued robust growth in membership and the lowest decline in profitability among the core health segments. The other segments did not fare as well as growth in medical expenses outpaced increases in premiums. At a consolidated level, health plans reported almost $1.6 billion in underwriting loss for 2024 which is down from the gain of $19 billion in 2023. Most of the loss in profitability came from the Medicare and Medicaid segments. Interestingly, this is the first time MFA has seen underwriting losses for government health programs since the launch of the Health Coverage Portal TM in 2006. MFA will continue to analyze and report on important health insurance segment performance and related topics. Stay tuned for future analysis briefs with valuable insights about the health care industry.
About Our Analysis
Medical expense ratio is calculated by dividing health care costs/claims incurred by premiums earned. This ratio indicates the amount of premium dollars spent on medical expenses. The higher the ratio, the less room there is for the plan to pay for its administrative costs, potentially impacting profitability. Per member per month (PMPM) calculations are also used to determine the amount of premium dollars earned and the amount of medical costs incurred for each member on a monthly basis. These calculations are performed by dividing premiums or medical claims incurred by the number of reported member months for the plan.
Data for this analysis was sourced from Mark Farrah Associates’ Health Coverage Portal™, Annual Exhibit of Premiums, Enrollment & Utilization (EPEU) and the Analysis of Operations by Lines of Business, as reported in the NAIC Financial Statements. Approximately 80% of the health insurance market is represented within the exhibit. Managed Medicaid plans & California HMO plans that do not report to the NAIC, along with NAIC-reporting Life, Accident & Health, and Property & Fraternal insurance plans do not file the exhibit. Health plans only offering specialty lines of health insurance are not included in this analysis. To improve the accuracy of our assessment, premiums earned, and member month data were estimated based on the NAIC Statement of Revenue and Expenses, due to incomplete or erroneous EPEU reporting by a small number of plans.
About Mark Farrah Associates (MFA)
Mark Farrah Associates (MFA) is a leading data aggregator and publisher providing health plan market data and analysis tools for the healthcare industry. Our product portfolio includes Health Coverage Portal™, County Health Coverage™, 5500 Employer Health plus, Medicare Business Online™, Medicare Benefits Analyzer™, and Health Plans USA™. For more information about these products, refer to the informational videos and brochures available under the Our Products section of the website or call 724-338-4100.
Healthcare Business Strategy is a FREE brief that presents analysis of important issues and developments affecting healthcare business today. If you would like to be added to our email distribution list, please submit your email address to the "Subscribe to MFA Briefs" section at the bottom of this page.