Health insurers are under significant financial pressure, and the gap between the organizations that are adapting and those that are not is growing, according to a new report.
HealthScape Advisors, an organization under Chartis, released its annual look at health plans' financial performance and found that the number of plans posting an operating loss has increased over the past several years. In 2023, 54% of health plans reported an operating loss, and that grew to 70% in 2024.
The number of insurers with an operating loss then rose a second time to 73% in 2025, according to the report.
Operating losses are concentrated among regional plans and Blues plans, with 72% of regional insurers and 83% of Blues reporting one in 2025.
However, the report also found that operating losses are growing among national carriers, too. Fourteen percent of national payers reported an operating loss in 2023 and 2024, but the rate jumped to 43% in 2025.
"Elevated medical costs, shifting government program economics and growing affordability constraints continue to bear down on health plans of all sizes," the consultants wrote.
In addition, the report found that the number of plans reporting three straight years of operating losses is also rising. About one-quarter (26%) of plans reported losses from 2021 to 2023, and that rose to 35% between 2023 and 2025.
While insurers have worked to mitigate financial pressures, improvements in administrative costs haven't been quite enough to offset rising medical costs, according to the study. Lacking capital reserves are also preventing the plans hit hardest from recovery.
For the organizations that can deploy the capital necessary, they are able to invest in new capabilities as well as pursue strategic priorities. For others, though, this means facing retrenchment, market exits or affiliation.
"While organizations have made progress, long-term financial resilience will require more than incremental operating improvement," per the report. "Health plans must fundamentally adapt how they allocate capital, manage medical trend[s], and work with providers."
The report offers three strategic priorities for payers looking to build greater strategic resilience amid financial pressure.
For one, plans should treat their capital reserves as a "strategic asset," per the consultants. Organizations with capital constraints are left with fewer alternatives to pursue when challenges arise.
Insurers should build a framework for their capital allocation strategies that prioritizes investments likely to deliver strategic or financial returns, according to the report, which establishes consistent criteria for analyzing investment opportunities.
In addition, plans should be making portfolio decisions that can support maintaining capital, including exits or affiliations if necessary.
Beyond capital management, as insurers respond to ongoing medical cost trends, they should prioritize capabilities around population health and modernized prior authorization.
A stronger strategic alignment with providers is also a critical priority, the consultants said. Better provider relationships can support managing utilization, site-of-care and costs.
"Organizations best positioned for long-term success will evaluate provider partnerships by their ability to influence medical trend[s], not simply to negotiate contracts," they wrote.