The Medicare Advantage Program in 2014. Since the Affordable Care Act: Health Insurance Company Revenues Have Increased


Analysis of data for several large publicly-traded insurance companies that participate in the MA program reveals that these insurers’ total revenues have increased by 29 percent since the enactment of the Affordable Care Act in 2010 (from $275 billion to $355 billion), and their combined operating profits have increased by 13 percent (from $20 billion to $23 billion). Meanwhile, these insurers’ profit margins have remained stable since the enactment of the Affordable Care Act, ranging from 5 to 6 percent on average between 2010 and 2013.35 Additionally, health insurance companies have looked to Medicare Advantage as an area to increase enrollment as employer-sponsored insurance coverage has eroded.36

Financial analysts continue to maintain a positive long-term view of the MA program, and have suggested that “the industry can absorb the proposed 2015 payment adjustments through increased efficiency and benefit reductions while retaining members and economics.” 37

35 Represents the unweighted average of the company-specific operating margins (total revenues divided by margins before income tax, interest, and non-net operating losses or gains) for 10 publicly-traded insurance companies participating in the Medicare Advantage (MA) program (e.g., with MA covered lives) that are included in the Bloomberg Industries dashboard, which includes information from these companies’ filings with the U.S. Securities and Exchange Commission (SEC). Together, these 10 companies account for 60 percent of total MA enrollment, including the 5 publicly-traded companies with the most MA enrollees, which collectively account for 50 percent of MA enrollment. The average operating margins (unweighted) for these 10 companies were: 5.2% in 2010, 5.9% in 2011, 4.9% in 2012, and 4.5% in 2013. The total combined revenue for these 10 companies was $275 billion in 2010, $285 billion in 2011, $312 billion in 2012, and $355 billion; and the total combined operating profits for these 10 companies was $20.2 billion in 2010, $21.6 billion in 2011, $21.9 billion in 2012, and $22.9 billion in 2013. These data include all company activities (such as non-health insurance business, overseas operations, etc.)

36 For example, analysts have stated that in 2013, the five largest publicly-traded U.S. health insurers’ “growth in revenue was driven primarily by insurers' targeted expansions of their Medicaid and Medicare Advantage enrollments, as most companies continued to experience attrition in their fully insured employer accounts.” Matt Dunning, “Medicaid, Medicare Advantage enrollment drive rise in health insurer revenue,” Business Insurance, March 30, 2014, accessed at

37 Wall Street Journal, “Health Insurers Rally as Fears Over Medicare Cuts Ease,” February 24, 2014, accessed at

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