Group Insurers Earned a 2.5% Profit in 2014

The Commonwealth Fund recently conducted an analysis comparing projected and actual financial performance for health insurance companies under the ACA in 2014. Here are some key findings from the report:

·         Medical claims were 2% higher in 2014 than insurers first projected.

·         Within the individual market, health insurers incurred losses of 4% of premiums.

·         Group insurers earned a profit of almost 2.5% in 2014.

·         More than a third of insurance companies improved/remained profitable from 2013 to 2014.

·         For individual coverage, medical claims were 5.7% higher than projected ($429 vs. $406 pmpm).

·         Most underestimated claims were offset by $7.9 billion in reinsurance payments from the government.

Source: Commonwealth Fund, July 20, 2016