A.M. Best Special Report: U.S. Health Care Industry Remains Resilient in a Year of Change

A.M. Best Special Report: U.S. Health Care Industry Remains Resilient in a Year of Change


The impact of the Patient Protection and Affordable Care Act (ACA) on large publicly traded health insurers has been less pronounced than initially anticipated with many carriers making a smooth transition into the post-ACA environment, according to a new special report from

The 2015 Review & Preview , titled “Health Care Industry Remains Resilient in a Year of Change,” details the challenges that played out as the remaining provisions of landmark health insurance legislation took effect. Among the major provisions implemented in 2014 was the rollout of health insurance exchanges, the elimination of medical underwriting, the individual mandate, Medicare Advantage reimbursement cuts, expansion of Medicaid eligibility, introduction of the health insurer fee and transitional programs pertaining to reinsurance, risk adjustment and risk corridors. Although the impact of these provisions on enrollment was significant – in the group and individual markets – it was less disruptive and negative than some had anticipated. This can be attributed to the numerous changes made to the law since it originally passed.

While commercial group coverage has continued to decline, carriers have seen membership growth across the industry, largely driven by government-funded programs, both managed Medicaid and Medicare Advantage, as well as modest premium growth from supplemental and ancillary accident and health coverages. In A.M. Best’s opinion, the aggregate earnings from the commercial segment will remain material for insurers but most likely will make up a smaller portion of overall earnings. A.M. Best also believes Medicaid will continue to be a material source of revenue for health insurers, but earnings in this segment could be a challenge.

A.M. Best’s rating outlook for the U.S. health segment remains stable; however, as to date insurers have generally managed well throughout the ACA’s implementation.

To access a copy of this special report, which includes a breakdown of the U.S. health sector, along with 2014 rating trends, please visit .