Surprising Insights: Health Insurance Profitability Rebounds for Individual and Small Group Markets in 2023

In 2023, the Individual and Small Group segments of the comprehensive medical/health insurance markets saw a significant change in their profitability levels. The analysis by Mark Farrah Associates (MFA) revealed that both segments were profitable for insurers, with underwriting gains returning to pre-pandemic levels.

The Individual segment experienced a 28.7% increase in enrollment, reaching 17.7 million members. Premiums PMPM for this segment rose by 2% to an average of $549 PMPM, while the average medical claims PMPM increased by 0.2% to $482 in 2023.

On the other hand, the Small Group segment experienced a decline in membership, dropping by 7.4% to 8.5 million in 2023. Small Group PMPM premiums have been increasing annually by an average of 7.7% since 2020, leading to a decrease in profitability for insurers in this segment.

The analysis was based on data from the National Association of Insurance Commissioners (NAIC) Supplemental Health Care Exhibit (SHCE). MFA is a prominent data aggregator and publisher that offers health plan market data and analysis tools for the healthcare industry through products such as Health Coverage Portal™, Medicare Business Online™, among others. Their aim is to simplify the analysis of health insurance business across all healthcare segments and continues to monitor competitive shifts and performance changes within these markets.

For more detailed information on the profitability of the Individual and Small Group health insurance markets in 2023, readers can access MFA’s full report titled “An Analysis of Profitability for the Individual and Small Group Health Insurance Markets” available on their website.

Overall, MFA’s analysis highlights that while there are different trends in membership and premium increases across these two segments, insurers are still able to achieve profitability levels with careful management of their portfolios and ongoing monitoring of market conditions.