Best’s Market Segment Report: U.S. Health Insurance Market Outlook Maintained at Stable
A new Best’s Market Segment Report, “Market Segment Outlook:
Key factors that could negatively affect health insurers in the coming year include an increase in medical claims above pricing assumptions and disruption from regulatory actions. Large-scale legislation that would impact the ACA in 2020 is unlikely; however, the uncertain outcome of an appeal of a federal district court ruling in
The report outlines other factors driving the stable market segment outlook, including:
- AM Best expects premium growth to be tempered in 2020 as rates for the individual ACA exchange and Medicare Advantage products are declining in many markets; however, the lower rate of premium growth should still result in continued improvement in risk-adjusted capitalization in 2020; and
- Net income in 2019 and in 2020 for many of the
Blue Cross Blue Shield plans will benefit from the elimination of the alternative minimum tax underU.S. tax reform.
This report also looks at the disability income (DI) and supplemental health markets, where macroeconomic factors continue to be major drivers of production and underwriting results, particularly in the DI segment. Sustained economic growth and good employment numbers, combined with rising interest rates, is expected to continue to provide stability in the disability income segment. Similar to that experienced in the employee benefits space, the supplemental and voluntary benefits markets also have seen considerable interest by new entrants and a high level of competition. Sales growth has fluctuated widely, but expansion in the supplemental health space experienced the last few years has continued in 2019, led by dental and DI sales, but other product lines such as limited benefit, short-term medical, critical illness and senior-focused products also have seen favorable growth.
To access a full copy of the market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=292339.
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Source: AM Best
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