|Last Quarterly Update:||10/14/2013|
|SIC Codes:||6321, 6324|
|Industry Overview||Trends & Challenges||Industry Forecast|
|Quarterly Industry Update||Call Prep Questions||Website & Media Links|
|Business Challenges||Financial Information||Glossary & Acronyms|
Companies in this industry underwrite health and medical insurance policies and administer group hospitalization plans, HMOs, and PPOs. Major companies include Aetna, the Blue Cross and Blue Shield Association, Humana, and UnitedHealth Group (all based in the US), as well as AEGON (the Netherlands) and Allianz (Germany).
Worldwide, demand for private health insurance is rising, especially in developing countries such as India and China, but also in countries with comprehensive government-provided health care. Private health insurance expenditures exceed $1 trillion annually, according to Swiss Re.
The US health insurance industry includes about 1,000 companies with combined annual revenue of more than $500 billion.
Demand for health insurance products is driven by the rising costs of medical care. The profitability of individual companies depends on efficient operations and the ability to negotiate favorable contracts with health care providers. Large companies and organizations have advantages in negotiating contracts with health care providers. Small companies can compete successfully by providing special coverage plans as part of government programs such as Medicaid, or for specialized populations. The US industry is concentrated: the 50 largest companies generate about 75 percent of revenue.
The Affordable Care Act (ACA) has altered the competitive landscape for health insurance companies. The ACA calls for health care coverage to be available for all Americans beginning in 2014; the law also eliminates some common exclusions, such as pre-existing conditions. Managed care companies ...
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