Though the U.S. health insurance industry saw gains in 2021, underwriting profits declined 65 percent to $23.9 billion, according to a report published July 6 by AM Best.
The report found that repercussions from COVID-19 and changing trends in health plan enrollment were responsible for the overall decline.
Six things to know:
- Among all payers, underwriting profits declined 65 percent to $23.9 billion.
- Commercial payers saw underwriting profits decrease 90 percent to $1.2 billion. This was driven by COVID-19 variant waves in the summer of 2021.
- Medicare Advantage plans reported a profit increase of $7.4 billion.
- Premiums grew in 2021 industrywide, but there was a slight decrease among group plans. That dip was offset by a major increase in individual ACA enrollment, which grew from 2.5 million to 14.5 million.
- Payers with diversified product portfolios weathered the decline better than those whose portfolios lacked diversity.
- Despite the pandemic impact, U.S. payers recorded record capital and a surplus of $273 billion for 2021, a 13.5 percent increase year over year.