The 2014 plan year was a good one for the nation's seven largest insurers, who collectively added 5.6 million members and generally saw profit margins in excess of 3.5 percent, according to a Mark Farrah Associates analysis.
The analysis examined the seven firms that cover or administer plans for more than half of all Americans: Aetna, Anthem, Cigna, Health Care Services Corp. (HCSC), Humana, Kaiser Permanente and UnitedHealth. The firms covered 144.7 million members in commercial, Medicare or Medicaid plans at the end of 2014, up from 139.1 at the end of 2013.
Of the seven, only UnitedHealth lost members, with 36.8 million members at the end of 2014 compared to 37.2 million in 2013. This "was primarily attributed to the loss of a large state employer account," according to the analysis. The firm's profit margin also dipped from 2013 (6.3 percent) to 2014 (5.8 percent).
Anthem ended the year with 37.5 million members, tops among the seven insurers. Much of its growth came from the integration of Amerigroup, which added 815,000 Medicaid members. Anthem reported a profit margin of 3.5 percent.
Aetna reported membership of 23.1 million at the end of 2014, thanks to 18 percent growth in Medicare Advantage membership and 700,000 new commercial members. The firm ended the year with a 4 percent profit margin. More recently, rumors swirled that Aetna may make an offer for Cigna or Humana to further expand its Medicare business, FierceHealthPayer previously reported, though Humana's inflated stock price may thwart a deal with Aetna.
Cigna, HCSC, Humana and Kaiser all saw smaller membership growth in 2014, though Kaiser's profit margin for 2014 exceeded 5 percent. The analysis did not include profit margins for Cigna, HCHS or Humana.
The insurers carried this momentum into 2015, with health insurance stocks hitting an all-time high in January and Aetna, Anthem, Cigna, Humana and UnitedHealth all posting positive first quarter results. What's more, Fitch Ratings expects insurers to see profit margins as high as 8 percent in 2015 as opposition to the Affordable Care Act continues to decline.
- read the analysis
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