U.S. health insurers did great in the first half of the year, according to analysts at Mark Farrah Associates.
Premium revenue increased more than claims for all four categories of health insurance the analysts analyzed: individual major medical insurance, group health insurance, Medicare Advantage plans, and managed Medicaid plans.
Individual major medical coverage — a product that has been in insurers’ doghouse — produced the strongest gains.
For individual major medical insurance, health care expense per member per month increased 7.6%, to $344.
Total individual major medical premium revenue fell 1.6%, to $34 billion, but revenue per member per month increased 17.4%, to $487.
The medical expense ratio, or ratio of benefits costs to premium revenue, fell to 70.8%, from 77.2%.
The analysts suggest that the main problem insurers face, going forward, is that “double-digit increases in premiums are not sustainable.”
But, for now, the individual market is showing some signs of stability, and insurers seem to be more inclined to increase participation in the individual market in 2019 than to pull back, the analysts say.
Here’s what the Mark Farrah analysts found when they looked at the other three health insurance sectors:
Group health: Premium revenue fell 10%, to $71 billion, but the medical expense ratio fell to 80.9%, from 81.8%.
Medicare Advantage: Premium revenue increased 10%, to $94 billion, and the medical expense ratio fell to 85.3%, from 86.1%.
Managed Medicaid: Premium revenue increased 3.8%, and the medical expense ratio fell to 88.6%, from 91%.
A copy of the commentary is available here.
— Read Mark Farrah: Insurers Likely Lost $6 Billion in 2015 Individual Health losses, on ThinkAdvisor.