US HEALTH AND MEDICAL INSURANCE MARKET - GROWTH, TRENDS

 Market segmented by purchase type (purchased directly, sponsored by the employer), products and services (PBMs, HDHPs, FFS/traditional compensation plans, managed care plans (HMO, PPO, POS, other products and services), place of purchase (in exchange and external market) Growth, trends and forecasts (2019-2024)

Market Overview

The health insurance market in the United States is the largest in the world, without being restricted by the World Health Organization's universal health coverage. Although 8% of the US population has no health insurance, the US continues to lead the growth in health insurance premiums in North America. This growth can be attributed to medical inflation, increased employment, and carry over some benefits from the health care policies of former US President Obama and Trump. According to cdc.gov - Center for Disease Control and Prevention, the US spent $3.8 trillion in 2019 roughly 17.7% of the country's GDP, putting the average per capita health spending in the US at 11,582 USD, which exceeds USD 12,000. In the year 2020. The US government put in place several health care legislation, to provide health coverage to the majority of the US population.

According to NAIC (National Association of Insurance Commissioners), more than 68% of healthcare coverage is provided by private insurance programs, such as PPOs, HMOs, Point of Sale schemes, etc. 130 billion in 2019, more than 60% of which came from the 25 largest health insurers. About 6% of Americans buy non-group health insurance, 50% have employer-provided insurance, 35% have Medicaid or Medicare and Military insurance while more than 9% remain uninsured as of 2019.

Drivers

Increase total health spending, which includes public and private spending on programs that promote health and disease prevention, while leveraging medical, paramedical, and nursing knowledge and technology.

The growth in total employment increases the demand for health insurance through health coverage sponsored by the individual and the employer

Limitations

Government regulations and related policy orders are affecting many unprecedented changes in the way health care coverage is provided to US citizens.

Expensive health insurance and expensive treatment did not see any improvement even after repeated state intervention due to the highly privatized sector.

Major market trends

High deductible health plans are popular among the public
These are plans with a higher deductible than any traditional insurance plan. The monthly premium is usually lower, but the person pays more health care costs themselves before the insurance company starts paying their share (the deductible). A High Deductible Plan (HDHP) can be combined with a Health Savings Account (HSA), allowing a person to pay certain medical expenses with federal tax-free money. The IRS defines a high-deductible health plan as any plan with a deductible of at least $1,350 for an individual, or $2,700 for a family. HDHP's total annual expenses (including deductibles, co-pays, and coinsurance) cannot be more than $6,650 per person or $13,300 per family (does not apply to out-of-network services).

The number of enrollments in these plans continues to grow year on year, as many employees feel the need to combat rising health care prices. Rising consumption may continue to drive the explosive growth of voluntary benefits among employees, and thus, HDHPs are gaining in popularity, in order to manage costs. A large group market with more than 50 employees remains the most popular setup for HDHP and HAS enrollment, according to AHIP. In 2017, 82% of enrollment occurred in large workplaces, followed by the small employer market (11%) and the individual market (7%)

ACA and healthcare

0.7 million people were enrolled in coverage through health insurance markets created under the ACA, including 9.2 million people who received premium tax credits and 5.3 million who received cost-sharing reductions. In Florida, Mississippi, Alabama, Nebraska, and Oklahoma, at least 95% of market enrollees receive premium tax credits and/or cost-sharing subsidies.

Insurers can no longer refuse coverage for pre-existing conditions, charge higher premiums based on health or gender, cancel coverage when someone gets sick or impose annual or life restrictions. About 54 million people have a pre-existing condition that could have resulted in them being denied coverage in the individual market prior to the ACA. Private insurers must now cover a wide range of preventive services without out-of-pocket costs for consumers. This includes cancer screenings, recommended chronic conditions, immunizations, and other services. Approximately 150 million people are enrolled in employer plans or through individual market insurance that must provide these free preventive services.

US Healthcare Insurance Market Key Trends

Insights about private health insurance (PHI) in the US
About 60% of the US population uses private health insurance services to take care of their health needs. PHI usually covers that which is not covered or partially covered under any public health program. Trump's sponsorship has had its benefits, and it plans to reduce the federal deficit by $150 billion by 2026. TrumpCare has increased HSA contributions from $3,400 to $6,550. Existing and excise tax-existing terms on prescription drugs, medical devices, and some medical plans as well.

According to the US Census Bureau, in 2018, private health insurance coverage was 68%, much higher than government coverage (32%). Within the different sectors of health insurance coverage, employer-based insurance was the most common, which covered about 56% of the population for several months, or all year, followed by Medicaid (19.3%), Medicare (17.2%), and outright insurance- Purchasing coverage (16.0%), and military coverage (4.8%). Private health insurance spending growth is expected to rise 0.5% to 5.6% in 2017, due in part to the increase in health insurance premiums in the health insurance market. However, spending is expected to slow by 0.7%, on average, for 2019-2020

US Healthcare Insurance Market Growth Rate

According to a report by the American Medical Association (or AMA), the private health insurance industry is highly concentrated, with 72% of all metropolitan areas lacking significant competition from health insurance companies.

The Henry J. Kaiser Family Foundation measured the competitiveness of the private health insurance market in 2013, using the Herfindahl-Hirschman Index (HHI) as an indicator. HHI takes into account the amount of market each of the competing firms controls within it (market share), and is expressed as a value between zero and 10,000. The lower the number, the more competitive the market is. The higher concentration of mergers and acquisitions of various health insurance companies is expected to raise antitrust concerns among consumers. This is a result of the health insurance company's monopoly power, due to consolidation, which gives it leverage to raise premiums and keep them above competition levels.

Most M&A activities focus on insurance companies associated with PBMs, to manage rising healthcare costs. A few examples include CVS's merger with Aetna (US$69 billion). This merger combines CVS pharmacies with Aetna's insurance business, hoping to cut costs. Cigna and Express Scripts closed on a $67 billion merger to lower healthcare costs and achieve better results. Walmart and Humana, which earlier signed up for Medicare's Part D low-cost prescription drug plan, have an impressive array of medical retail capabilities -- PBM -- focused on serving the growing medical benefits market.

The main players
United Health Group
National anthem
Humana group
HCSC . group
Centene . Company
UnitedHealth Grou0p, Anthem, Humana Group, HCSC Group, Centene Corporation
Healthcare after pandemic
The Covid-19 crisis has simultaneously created a surge in demand for health care due to spikes in hospitalization and diagnostic testing while threatening to reduce clinical capacity as health care workers contract the virus themselves. The increased mismatch between patient needs and provider capacity highlights one of the most pervasive inadequacies of the U.S. health care system.

During the pandemic, many insurance companies found themselves in a surprisingly strong position. They continued to take in premium dollars from members. At the same time, because elective health care largely disappeared, insurers didn’t have to pay much out. Looking ahead, insurance plans must confront the fact that health care spending levels are likely to increase dramatically to care for COVID-19 patients and for the many members who have deferred non-critical health care.

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