In 2025, 73% of health plans had an operating loss, up from 70% in 2024 and 54% in 2023.
While 42% of health plans grew their operating margin from 2024, and 16% with losses in 2024 became profitable the following year, financial challenges persist for the majority. Using filings sent to the National Association of Insurance Commissioners, HealthScape Advisors — a consulting firm under Chartis — outlined financial trends in an Aug. 6 report.
The research pointed to past reporting indicating that major insurers have been bolstering their reserves and expanding reinsurance “to help protect against the volatility they now expect to be the norm.”
Here are seven notes from the report:
1. Operating losses are most common for Blues and regional plans. In 2025, 83% and 72% of Blues and regional nonprofit plans, respectively, had an operating loss, an increase from 48% and 57% in 2023. Forty-three percent of national plans, on the other hand, had an operating loss in 2025, up from 14% in 2023.
2. For the 2023-2025 period, more than two-thirds of health plans logged at least three years of consecutive losses. That is up from 12% in the 2020-2022 period.
3. Premiums are not the issue, having median increases of 5.5%, 9.9% and 11.8% across commercial, Medicare and Medicaid businesses from 2024 to 2025. However, medical costs increased 8.5%, 11.6% and 12.2% across those product lines over the same window, as well. Despite revenue increases, medical costs have caught up with insurers thanks to provider consolidation, specialty pharmacy, outpatient utilization and higher-acuity utilization.
4. Medicaid organizations are particularly vulnerable given possible enrollment contraction with HR 1 requirements, such as work rules and more frequent eligibility checks.
5. Looking at risk-based capital ratios, organizations with strong capital positions tended to have lower medical cost growth compared to their vulnerable peers. Median annual medical expense growth per member per month was 9.4% for those with strong capital positions versus 11.6% for those with vulnerable capital positions. Median annual revenue growth per member per month was 8.5% and 9.4%, respectively.
6. Regional nonprofits have the most range with capital positioning, while Blues plans tend to have stronger positions.
7. The report advised plans to strategize around capital allocation, mitigate drivers of medical costs and strengthen provider relationships.
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