United States Health and Medical Insurance Market – Growth, Trends, Impact of COVID-19 and Forecast (2022-2027)
New York, May 03, 2022 (GLOBE NEWSWIRE) — Reportlinker.com announces the release of the report “United States Health and Medical Insurance Market – Growth, Trends, COVID-19 Impact, and Forecast (2022 – 2027) – https://www.reportlinker.com/p06272900/?utm_source=GNW
This growth can be attributed to medical inflation, rising employment, and some postponement of the benefits of former US President Obama and Trump’s health policies. According to cdc.gov – Center for Disease Control and Prevention, the United States spent $3.8 trillion in 2019, or nearly 17.7% of the country’s GDP, bringing the average health expenditure per person in the United States at $11,582, which broke the $12,000 mark. in 2020. The US government has established many health care legislations, in order to provide health coverage to the majority of the US population.
According to the National Association of Insurance Commissioners (NAIC), more than 68% of health care coverage was provided by private insurance programs, such as PPOs, HMOs, POS plans, etc. The top 25 insurers in the United States accounted for approximately USD 130 billion in 2019, of which more than 60% came from the top 25 health insurers. About 6% of Americans have non-group type health insurance, and 50% have employer-provided insurance, 35% have Medicaid or Medicare and Military insurance while more than 9% remain uninsured in 2019.
Increase in total health expenditure, which includes public and private expenditure on health promotion and disease prevention programs, through the use of medical, paramedical and nursing knowledge and technology
Overall employment growth is increasing demand for health insurance through individual and employer-sponsored health coverage
Government regulations and related policy orders are effecting many unprecedented changes in the way healthcare coverage is provided to US citizens.
Expensive health insurance and even expensive treatment have seen no improvement even after repeated state interventions due to the highly privatized sector.
Main market trends
High-deduction health plans are gaining popularity with the public
These are plans with a higher deductible than any traditional insurance plan. The monthly premium is usually lower, but you pay for more health care costs yourself before the insurance company starts paying its share (your deductible). A high-deductible plan (HDHP) can be combined with a health savings account (HSA), allowing some medical expenses to be paid with money free of federal taxes. 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. An HDHP’s total annual out-of-pocket expenses (including deductibles, copayments, and coinsurance) cannot exceed $6,650 for an individual or $13,300 for a family (not applicable to out-of-network services ).
Enrollment in these plans continues to grow year over year as many employees feel the need to combat rising healthcare prices. Growing consumerization may continue to drive the phenomenal growth of voluntary benefits among employees, and as a result, HDHPs are gaining popularity, in order to manage costs. The market for large groups of more than 50 employees remains the most popular setting for HDHP and HAS registration, according to AHIP. In 2017, 82% of enrollments were at large employers, followed by the small employer market (11%) and the individual market (7%).
ACA and Health Care
0.7 million people were enrolled in coverage through the health insurance marketplaces created under the ACA, including 9.2 million who received premium tax credits and 5.3 million who have obtained 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 deny coverage for pre-existing conditions, charge higher premiums based on health status or gender, revoke coverage when someone becomes ill, or impose annual or lifetime limits. About 54 million people have a pre-existing condition that could have caused them to be denied coverage in the pre-ACA individual market. Private insurers must now cover a wide range of preventive services at no cost to consumers. This includes recommended cancer and chronic disease screenings, vaccinations and other services. Nearly 150 million people are affiliated with employer-sponsored schemes or through individual market insurance that must provide these free prevention services.
Insights into Private Health Insurance (PHI) in the United States
About 60% of the US population uses private health insurance services to take care of their health needs. Private health insurance generally covers those who are not covered, or partially covered, by a public health program. Trump Care had its benefits, it had planned to cut the federal deficit by $150 billion by 2026. Trump Care increased Health Savings Account (HSA) contributions from $3400 to $6550. Trump care also provided subsidies for people with pre-existing conditions and the repeal of the consumption tax 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%, significantly higher than government coverage (32%). Across the different segments of health insurance coverage, employer-based insurance was most common, which covered about 56% of the population for a few months or the whole year, followed by Medicaid (19.3% ), Medicare (17.2%), purchase coverage (16.0%), and military coverage (4.8%). Growth in private health insurance spending is expected to have increased by 0.5%, to 5.6%, in 2017, partly due to higher health insurance market premiums. However, spending is expected to slow by 0.7%, on average, for 2019-20
According to a report by the American Medical Association (or AMA), the private health insurance industry is highly concentrated, with 72% of total metropolitan areas lacking significant competition from health insurers.
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. The HHI takes into account the share of a market controlled by each of the competing firms (market share) and is expressed as a value between zero and 10,000. The lower the number, the more competitive the market. The increased concentration resulting from the merger and acquisition of various health insurers should raise antitrust concerns among consumers. This is the result of the health insurer’s monopoly power, due to consolidation, which gives it leverage to raise and maintain premiums above competitive levels.
Most M&A activity is focused on insurance companies partnering with PBMs to manage rising healthcare costs. Few examples include the CVS merger with Aetna (69 billion USD). This merger combines CVS’s pharmacies with Aetna’s insurance business, hoping to reduce costs. Cigna and Express Scripts entered into a $67 billion merger to reduce healthcare costs and achieve better outcomes. Walmart and Humana, which previously partnered on a low-cost Medicare Part D prescription drug plan, have an impressive array of medical retail — PBM — capabilities focused on the growing benefits market. Health Insurance.
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