Year-Over-Year Health Insurance Segment Profitability Trends
August 25, 2026
In this brief, Mark Farrah Associates (MFA) compared year-over-year profitability for the Individual, Employer-Group, Medicare Advantage, and managed Medicaid health insurance segments. Financial insights were gleaned from aggregated 2024and 2025 National Association of Insurance Commissioners (NAIC) statutory financial data from MFA’s Health Coverage Portal™.
.Individual Segment Performance
According to financial statements filed by insurers and estimated by Mark Farrah Associates, enrollment in Individual medical plans totaled approximately 25 million, as of December 2025, as compared to 25.4 million at the end of 2024. The 1.5% decline marks the first decrease in enrollment since 2019 for the segment
For 2025, premiums earned increased 6.6% while health care services (medical expenses) incurred grew 16.5% since 2024. On a per member per month (PMPM) basis, which accounts for changes in membership and reporting plans, premiums increased 2.5%, while medical expenses grew 12%. The average medical expense ratio for the individual segment in 2025 was 93.2%, as compared to 85.3% the previous year.
Amongst the top plans, Elevance reported the lowest medical expense ratio with 87%. Oscar, reported the second lowest medical expense ratio amongst the top plans, with 88.5% for 2025 after growing their enrollment in the segment by 25% over 2024. Oscar also reported the lowest overall growth in their medical expense ratio amongst segment leaders. Both Centene and UnitedHealth experienced increased medical expenses, which greatly outpaced premium growth, and that of the rest of the segment.
Employer-Group Segment Performance
Health insurance companies in the Employer-Group risk segment reported approximately 41.4 million members, as of December 31, 2025, down 4.2% from 2024. For health insurers with Employer-Group business, profitability decreased for 2025. In 2025, premiums earned increased 1.7%, and medical expenses increased 3.7% compared to 2024. On a PMPM basis, premiums earned increased 6.6% over 2024, while medical expenses grew by 8.6%. The growth in medical expenses, which more than offset the increase in premiums, pushed the average medical expense ratio for this segment up to 89.7% for 2025, from 88% in 2024.
Per the chart below, BCBS MI experienced the largest decrease in its medical expense ratio between 2024 and 2025, dropping to 88.1% due to their 7.3% increase in premiums PMPM outpacing growth in medical expenses. HCSC reported the largest increase in medical expenses pmpm, leading to the largest increase in the medical expense ratio amongst the leading plans.
Medicare Advantage Performance
The Medicare Advantage (MA) segment continues to rapidly grow. According to the Centers for Medicare and Medicaid Services (CMS), Medicare Advantage enrollment reports aggregated by MFA in Medicare Business Online™, total Medicare Advantage plan enrollment was approximately 35.7 million; a growth of over 1.1 million members since 2024. Year-over-year profitability for this segment, like the Group segment, has decreased. For 2025, premiums earned increased 16.1% while medical expenses increased 18% from 2024. On a PMPM basis, premiums earned have increased 11.8% from 2024, while medical expenses grew by 13.6%. The growth in medical expenses, which was greater than the increase in premiums, pushed the average medical expense ratio for this segment up to 91% for 2025, from 89.5% in 2024.
Turning our attention to the segment leaders in the chart below, not all the plans reported increases in their medical expense ratios for 2025. CVS reported a 15.2% increase in premiums PMPM, the highest amongst the leading plans, helping to drive their medical expense ratio down to 89.3% from 92.4% in 2024. UnitedHealth reported the largest increase in the medical expense ratio amongst the leading plans after experiencing the largest increase in medical expenses PMPM.
Managed Medicaid Performance
December 2025 Medicaid and CHIP membership was 76.2 million members, according to CMS, which is down approximately 2.9 million members from December 2024. For 2025, premiums earned increased 9.4% while medical expenses incurred increased 8.9% from 2024. On a PMPM basis, premiums earned increased 14.3% over 2024, while medical expenses increased 13.7%. The increase in premiums offset the increase in medical expenses PMPM, pushing the medical expense ratio down to 90.8% in 2025.
With rising premiums outpacing medical expenses, the segment average medical expense ratio for Medicaid decreased year-over-year. However, for the segment leaders, only Elevance reported results leading to a decreased ratio mainly due to slower growth in medical expenses. The remaining segment leaders all experienced increases in their medical expense ratios.
Conclusion
For 2025, the Individual and Group segments experienced declines in both membership and profitability, with the Individual segment suffering a larger financial impact. Medicare gained enrollment but growth in medical expenses squeezed profits in 2025. Medicaid was the only segment to report a decrease in the medical expense ratio however the segment was still unprofitable for 2025. At a consolidated level, health plans reported almost $10.4 billion in underwriting loss for 2025 which was significantly worse than the $1.7 billion loss for 2024. Most of the loss in profitability came from the Individual and Medicare segments.
MFA will continue to analyze and report on important health insurance segment performance and related topics. Stay tuned for future analysis briefs with valuable insights about the health care industry.
About Our Analysis
Medical expense ratio is calculated by dividing health care costs/claims incurred by premiums earned. This ratio indicates the amount of premium dollars spent on medical expenses. The higher the ratio, the less room there is for the plan to pay for its administrative costs, potentially impacting profitability. Per member per month (PMPM) calculations are also used to determine the amount of premium dollars earned and the amount of medical costs incurred for each member on a monthly basis. These calculations are performed by dividing premiums or medical claims incurred by the number of reported member months for the plan.
Data for this analysis was sourced from Mark Farrah Associates’ Health Coverage Portal™, Annual Exhibit of Premiums, Enrollment & Utilization (EPEU) and the Analysis of Operations by Lines of Business, as reported in the NAIC Financial Statements. Approximately 80% of the health insurance market is represented within the exhibit. Managed Medicaid plans & California HMO plans that do not report to the NAIC, along with NAIC-reporting Life, Accident & Health, and Property & Fraternal insurance plans do not file the exhibit. Health plans only offering specialty lines of health insurance are not included in this analysis. To improve the accuracy of our assessment, premiums earned, and member month data were estimated based on the NAIC Statement of Revenue and Expenses, due to incomplete or erroneous EPEU reporting by a small number of plans.
About Mark Farrah Associates (MFA)
Mark Farrah Associates (MFA) is a leading data aggregator and publisher providing health plan market data and analysis tools for the healthcare industry. Our product portfolio includes Health Coverage Portal™, County Health Coverage™, 5500 Employer Health plus, ASO Employer Health plus, Medicare Business Online™, Medicare Benefits Analyzer™, and Health Plans USA™. For more information about these products, refer to the product pages and brochures available under the Our Products section of the website (www.markfarrah.com) or call 724-338-4100.
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