Jeffrey Wade
The US health insurance market is a complex landscape with multiple factors to consider, and every person has unique needs. While some may opt for employer-provided insurance, others may choose to purchase their own policies. The market is dominated by large, for-profit companies such as UnitedHealth, which wrote roughly $248 billion in premiums in 2023, and Humana, which offers coverage nationwide. These for-profit companies have come under scrutiny for their financial practices, with some steering money to investors while claiming losses. Additionally, over the past 20 years, healthcare companies have spent 95% of their net income on shareholder payouts, totaling $2.6 trillion. This has led to concerns that funds are being distributed to shareholders rather than being reinvested in the healthcare system.
| Characteristics | Values |
|---|---|
| Top health insurance companies | Kaiser Permanente, UnitedHealthcare, Aetna, Highmark, Elevance, HCSC, Humana, Cigna, Molina |
| Kaiser Permanente's ranking | 4.19 out of 5 stars for affordability and 4.2 out of 5 stars for the National Committee for Quality Assurance (NCQA) |
| UnitedHealthcare's ranking | N/A |
| Humana's ranking | 3.95 out of 5 stars |
| Profits of insurance companies in Florida | Limited by regulators to about 4.5% |
| U.S. health insurers' net earned premiums in 2023 | $1.08 trillion |
| U.S. health insurers' net earned premiums in 2022 | $1 trillion |
| UnitedHealth's net earned premiums in 2023 | $248 billion |
| Percentage of net income spent on shareholder payouts by health care companies | 95% |
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What You'll Learn
Medical insurance companies' profits and executive compensation
Medical insurance companies, also known as health insurers, play a significant role in providing financial protection and access to healthcare services for individuals and families. While their primary role is to offer peace of mind and assistance in times of medical need, they are also businesses that aim to generate profits.
The profitability of medical insurance companies has been a topic of interest, with some questioning whether their profits stem from their core insurance business or other ventures. Notably, insurers have been merging, acquiring, and aligning with various parts of the healthcare ecosystem to boost profits and leverage their connections to negotiate better deals and drive down costs. This pursuit of profit has raised concerns about conflicts of interest and potential fraud, particularly when insurers have significant control over healthcare providers and systems, as seen with UnitedHealth Group's influence in the US market.
In terms of specific companies, UnitedHealth Group, the largest health insurer in the US, has come under scrutiny for its extensive network and influence. Its CEO, Andrew Witty, earned nearly $20.9 million in total compensation, including salary, non-equity incentives, stock incentives, and option awards. Other notable CEO compensations include that of Molina Healthcare's CEO, Lynch, who earned over $21.3 million in total compensation, and Humana's CEO, Broussard, whose compensation totaled nearly $17.2 million.
While these companies strive to increase profits, it is worth noting that some insurers, like Kaiser Permanente, choose to operate as not-for-profit entities. Kaiser Permanente, which tied for first place with UnitedHealthcare in Insure.com's ranking of the Best Health Insurance Companies for 2025, is one of the nation's largest not-for-profit health plans. This diversity in business models highlights the range of approaches within the medical insurance industry.
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For-profit companies' goal to make a profit
For-profit companies have a primary goal of maximising profits and generating income for their founders, leaders, and employees. They are driven by financial gain and growth and are focused on improving sales and profits. The company culture is centred around meeting financial goals and increasing short- and long-term revenue. For-profit companies are incentivised to be innovative and create new products and markets to achieve these financial objectives.
These companies often consist of paid employees and interns, and they fund their operations through bank loans, local and national/global investors, and revenue from sales. They generate revenue by selling goods and services to consumers and can have a specific, defined target audience for their products or services. For-profit businesses perform market research to identify their ideal customers and then target their resources to reach this audience.
The structure of a for-profit company is chosen based on various factors, including goals, business experience, target audience, and desired tax advantages. They are subject to different tax laws compared to nonprofits, as they must pay taxes on their business endeavours and profits as stipulated by federal and state governments.
In the healthcare insurance industry, for-profit companies, such as Humana, aim to provide coverage to customers nationwide. They compete with nonprofit insurance providers, like Kaiser Permanente, which was ranked as one of the best health insurance companies in 2025.
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Alternatives to medical insurance companies
Medical insurance companies are for-profit businesses that provide health coverage to individuals and groups. They offer various plans with different premiums, deductibles, and benefits, and their profitability is tied to their ability to collect more in premiums than they pay out in claims. However, some people are seeking alternatives to traditional medical insurance companies due to concerns about affordability, complexity, and dissatisfaction with the current system. Here are some alternatives to medical insurance companies:
Health Reimbursement Arrangements (HRAs)
HRAs are a popular alternative for small businesses that want to provide health benefits to their employees without the high costs of traditional insurance plans. With an HRA, employers can reimburse employees for a wide range of qualifying healthcare costs, including health insurance premiums, vision, and dental coverage. There are different types of HRAs, such as the Qualified Small Employer HRA (QSEHRA) and the Individual Coverage HRA (ICHRA), each with its own set of rules and restrictions.
Health Stipends
Health stipends are a flat amount of money given to employees by their employers to spend on medical expenses, such as health insurance policies, supplemental plans (dental and vision coverage), and other out-of-pocket medical costs. Stipends are considered extra wages and are taxable at the end of the year, but they offer employees more flexibility and choice in how they allocate their healthcare spending.
Health Sharing Programs
Health sharing programs, such as CrowdHealth, offer a crowdfunding model for healthcare expenses. Members contribute to each other's medical bills and receive assistance when they need financial support for specific medical issues. However, it's important to note that health sharing programs are not insurance and may have limitations on the types of procedures and conditions they cover.
Group Coverage through Employers
Individuals can often obtain health insurance through their employers or their spouse's employers. Group coverage is a common way to access health insurance and may be a more affordable option than purchasing individual coverage.
ACA Plans, Medicare, or Medicaid
Depending on your income, age, and other factors, you may be eligible for an Affordable Care Act (ACA) plan, Medicare, or Medicaid. These programs provide health coverage to individuals who meet certain criteria and are typically more affordable than private insurance options.
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Medical insurance companies' market share
In 2022, UnitedHealth Group Inc. was the market leader with a 14% share of the US health insurance market. This was followed by Elevance Health and CVS (Aetna), with market shares of 12% and 11% respectively. UnitedHealth Group was also the largest health insurer by market share in 42% of MSAs in 2022, followed by Humana with a market share lead in 22% of MSAs, and CVS (Aetna) with a market share lead in 7% of MSAs.
At the national level, the 10 largest health insurers by market share in 2023 were:
- Centene Corp. (14%)
- Blue Cross Blue Shield of Florida (9%)
- Kaiser Permanente (7%)
- Bright Health (7%)
- Oscar Health (5%)
- Elevance Health (4%)
- Health Care Service Corp. (4%)
- Blue Shield of California (4%)
- Blue Cross Blue Shield of North Carolina (3%)
- Molina Healthcare (3%).
Other top health insurers in the US include Humana, HCSC, Cigna, and Molina.
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Medical insurance companies' customer satisfaction
Medical insurance companies, like any other business, can be for-profit or not-for-profit. For example, Kaiser Permanente, which is one of the top-ranked health insurance companies, is a not-for-profit organisation.
Customer satisfaction is a key metric for health insurance companies, and it is influenced by various factors. A KFF survey revealed that only about half of consumers with insurance-related problems had their issues resolved to their satisfaction. This is a critical area that insurance companies need to address to improve overall customer satisfaction.
The quality and reliability of mobile apps are the highest-rated benchmarks for customer satisfaction in the health insurance industry, with scores of 80 each. This is followed by access to primary care doctors and website satisfaction, both rated at 77. Interestingly, call centre satisfaction and the range of plans available are the least important to customers, scoring 73 each.
The complexity of choosing the best health insurance plan is acknowledged by many, and it is recommended that individuals consider their unique needs and circumstances. For instance, some may prioritise low premiums, while others may focus on minimising out-of-pocket costs when visiting the doctor.
Some customers, frustrated with the challenges of dealing with insurance companies, are turning to alternative models like health-care sharing platforms such as CrowdHealth. However, these platforms also come with limitations, such as not covering pre-existing conditions and specific exclusions for certain demographics.
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Frequently asked questions
Yes, there are medical insurance companies that are structured as non-profit organisations. However, the majority of medical insurance companies are for-profit entities.
For-profit insurance companies accept only younger, healthier patients on whom they can make a profit. They charge different rates depending on factors like age, and they produce different types of policies that provide different levels of protection for different amounts of money.
The top 5 US health insurers' annual profits jumped 230% since the ACA's passage. America's largest health insurers have made more than $371 billion in profits since the passage of the Affordable Care Act, with more than 40% of that net income going to UnitedHealth Group.
There is a perception that for-profit medical insurance companies prioritise profits over patients' health. For example, UnitedHealthcare, the largest US insurer, reportedly denies nearly one in three medical claims from policyholders. There is also a concern that high market concentration among health insurers reduces competition, leading to higher insurance premiums.
