This blog was updated in May, 2023
You probably already know that health insurance companies make up a massive segment of the U.S. economy, but you may not realize just how big a segment.
In fact, the health and medical insurance industry in the United States is a $1.2 trillion dollar enterprise currently, and one that has grown 2.3 percent each year on average between 2018 and 2023, although the market size of the Health and Medical Insurance industry is expected to decline by -0.7 percent in 2023.
And if you were pressed, you could probably name a half dozen or so health insurance companies. But there are likely far more health insurance providers than most of us realize.
In fact, according to data at ValuePenguin.com,
“In the United States, there are currently more than 900 health insurance companies that offer medical coverage. However, the health insurance industry is dominated by five companies: Anthem, UnitedHealthcare, Humana, Health Care Service Corporation (HCSC) and CVS Health Corp., who control more than 38% of the market.”
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After a hesitant and, in many cases, a rocky start, the individual health coverage market has seen fairly steady growth. In fact, this was summarized in an article from McKinsey & Company which related that,
“The year 2023 marks the tenth year of operation for the US health insurance exchanges since they launched as part of the Affordable Care Act in 2014. The individual market has remained fluid during this time, with insurer participation, pricing, and plans changing from year to year.
Consumer participation increased 25 percent to approximately 16 million from 2020 to 2022, coincident with extended enrollment periods and enhanced subsidies implemented under the American Rescue Plan Act of 2021 and extended through 2025 by the Inflation Reduction Act of 2022.”
It’s Big and Is Getting Bigger
Back in January 2023, the Biden administration announced that a record-breaking 16.3 million plus people had selected an Affordable Care Act (ACA) Marketplace health plan nationwide during the 2023 Marketplace Open Enrollment Period.
Keep in mind that the health insurance market is roughly divided between employer-based group insurance and what is known as individual health insurance. Consequently, the industry’s growth is somewhat staggered between the two, as one recent report notes.
“The North America individual health insurance market size is anticipated to reach USD 2.56 trillion by 2030. It is anticipated to expand at a CAGR of 6.1% from 2023 to 2030.
Due to their flexibility and ability to cover services that employer-based insurance cannot, individual health insurance plans are quite effective. Moreover, family floater plans or group insurance plans may not be sufficient for people with large families or those who have elderly family members.
The main advantage of an individual health insurance plan is that it provides coverage that is significantly more comprehensive than other plans as each individual has their own sum insured, as compared to a family floater where the sum insured is shared by everyone who is covered under the policy.”
Another growing trend in the individual health coverage industry is the increase in Medicare Advantage plans. As one article highlighted recently,
“In the last five years, the average number of Medicare Advantage plans available to beneficiaries has more than doubled from an average of 20 health plans per beneficiary in 2018 to 43 plans per beneficiary in 2023. Major payers including Aetna, UnitedHealthcare, and Elevance Health offered benefits cards that Medicare beneficiaries could use to cover transportation, groceries, and other needs.”
A Vast Field Dominated by a Handful of Giants
Of all these 900-plus health insurance providers, only a few can offer their products and services in California. And of these, Blue Cross Blue Shield California is the largest. In addition, just 10 companies make up almost 50 percent of the industry’s overall market share/revenue, which leaves the other half being shared among almost 900 other organizations.
When it comes to ranking these companies by size, the metrics matter.
The default measurement for many is often market share. For example, the largest health insurance companies in the United States based on the percentage of market share are as follows:
- UnitedHealthcare Group: 12 percent
- Anthem Blue Cross: 11 percent
- Centene: 10 percent
- Humana: 7 percent
- HCSC: 6 percent
When ranked by the total number of members covered, also known as “covered lives” in the industry, the list looks like this:
- UnitedHealth Group 58 million members
- Anthem Blue Cross 45 million members
- Aetna 39 million members
- Cigna 18 million members
- Humana 17 million members
While these rankings give a sense of both the size and reach of the companies listed, it doesn’t necessarily reflect the overall quality or member-rating of the companies listed.
How Do You Rate Health Insurance Companies?
The approach taken by Investopedia was to review the data found at the nonprofit rating group the National Committee for Quality Assurance (NCQA), the American Customer Satisfaction Index (ACSI) survey of almost 300,000 consumers, and the J.D. Power customer satisfaction survey of more than 28,000 commercial health plan members.
After factoring in a number of various elements, Investopedia ranked their choice of top health insurance companies of 2023 by a dominant benefit.
- Best for Robust Coverage: Blue Cross Blue Shield.
- Best Value Plans: Oscar.
- Highest Quality Plans: Kaiser Permanente.
- Best for Same-Day Care: Aetna CVS Health.
- Best for Medicare Advantage Plans: UnitedHealthcare.
Nonetheless, while these are quite helpful for narrowing down your choices to a manageable three or four contenders, your location and your personal coverage needs cannot be factored by some unseen third-party evaluation.
This is echoed by a post at TheBalance.com,
“There are several criteria to keep in mind when choosing from the best health insurance companies, including financial strength, customer service ratings, claims service, plan prices, policy offerings, coverage benefits, and provider choices. There is no one ‘best’ health insurance company, but the best one for you will depend on the type of health insurance you need, your budget, and what is available in your area.
The region you live in will determine which health insurers you have access to, and coverage options vary from state to state.”
Another key consideration is your role in the purchasing decision and your status as a potential member.
For example, your choices are going to be determined by whether you are a small business owner looking to offer health insurance coverage to your employees, an individual or parent with a family buying your own coverage, someone whose income qualifies you for Covered California, or a senior looking for California Medicare plan.
Each of these scenarios presents its own options and limitations for health insurance provider choices.
In general, we would rank the top five health insurance companies serving California as:
- Anthem Blue Cross
- Kaiser Permanente
Let’s take a closer look at these top five health insurance providers for California residents.
Spotlighting the Top 5 Health Insurance Companies
UnitedHealthCare has an excellent financial strength rating from AM Best Company and is a part of UnitedHealth Group, which is the largest health insurer in the United States, according to The Balance. This means that it has established itself as a quality insurer.
UnitedHealthcare offers individual insurance plans that meet the Affordable Care Act (ACA) requirements for essential care.
Overall, UnitedHealthCare offers one of the largest PPO networks in the nation, and its online healthcare services have been highly rated.
Because no organization is perfect, a few less-than-positive items need to be noted here. Their overall customer satisfaction ratings in the J.D. Power Commercial Member Health Plan Study for 2019 were average or less-than-average.
Aetna has an excellent reputation among members and is also one of the largest for-profit health insurers in the country. And, like UnitedHealthcare, Aetna also has an “A” (excellent) financial strength rating with AM Best Company.
According to the Aetna corporate website,
“Aetna offers health insurance, as well as dental, vision and other plans, to meet the needs of individuals and families, (and) employers.”
Aetna offers affordable private health insurance plans with options including preventive care, office visits, hospitalization, immunizations, and other types of essential health care services. Aetna also provides access to HSA plans, which members can use with high-deductible plans.
Some of the upsides of Aetna include their HSAs, the comprehensive nationwide coverage, and their wellness programs. However, the company only received a 3.8-star overall rating from Insure.com although, when it comes to overall customer satisfaction, customers have indicated that they would recommend Aetna to a friend with a 4.4-star customer satisfaction rating.
3. Anthem Blue Cross
Anthem Blue Cross is the largest for-profit managed healthcare company in the Blue Cross Blue Shield Association. In addition, it is also one of the largest healthcare companies in the United States. In June 2022, Anthem became Elevance Health, although policies continue to be marketed under the Anthem and Blue brands.
Anthem’s corporate website notes that,
“Through its affiliated companies, Anthem serves more than 106 million people, including more than 42 million within its family of health plans. We aim to be the most innovative, valuable, and inclusive partner.”
It adds, “One in eight Americans receives coverage for their medical care through Anthem’s affiliated plans.”
The company is the largest health insurer in the state of California, where it operates as Anthem Blue Cross and currently has about 800,000 members.
Insure.com gave Anthem Blue Cross a 3.6-star overall rating in their annual review of Best Health Insurance Companies. This was broken down as earning between 3.5 to 4 stars out of 5 in the category of claims, price, and customer service, while their website and apps earned them a 4-star rating.
Humana Inc., a for-profit health insurance company based in Louisville, Kentucky, had over 22 million members in the U.S. as of 2023.
Humana comes in as the fifth-largest health insurance company by membership but is currently the third-largest health insurance company in the nation in terms of market share, behind Aetna and UnitedHealthCare Group.
Humana, Inc. has an A+ rating with the Better Business Bureau, although it only earned a composite score of 3.7 out of 5-star rating based on BBB customer reviews.
While Humana offers a wide variety of health insurance products and is considered a great choice for health insurance coverage, as of 2018, Humana is no longer offering individual medical insurance, according to its corporate website.
Humana offers its members a wide variety of products and services, including health, vision, and dental insurance plans. Furthermore, they are a good option for many Medicare Advantage plan options, and Humana provides Medicare and Medicaid.
Although the company has been given somewhat negative reviews, they have diligently attempted to fix issues and improve their member’s experience. The majority of complaints listed include programs with products or service issues, but this has not impacted their BBB accreditation.
Humana has earned kudos for its member benefits, its Medicare Advantage customer satisfaction, and its impressive financial stability.
On the downside, there is the issue of a lack of individual health insurance offerings and problems with customer service.
5. Kaiser Permanente
Kaiser Permanente is one of the nation’s largest not-for-profit health insurance providers, serving over 12 million members. It offers employer-provided plans, Medicaid, Medicare, charitable health insurance, and other private insurance plans.
The Kaiser Permanente website notes that,
“At Kaiser Permanente, physicians are responsible for medical decisions. The Permanente Medical Groups, which provide care for Kaiser Permanente members, continuously develop and refine medical practices to help ensure that care is delivered in the most efficient and effective manner possible.”
According to the 2020 J.D. Power & Associates Commercial Member Health Plan Study, Kaiser Permanente ranked at the top in California, Colorado, Maryland, and the Northwest and South Atlantic regions. In addition, Kaiser Permanente is No. 1 on Insure.com’s 2023 Best Health Insurance Companies list – earning 4.2 stars out of 5.
However, only 49 percent of people surveyed would definitely recommend Kaiser Permanente and an additional 38 percent said they would probably recommend it. On the other hand, a whopping 90 percent of its customers plan to renew their policies.
When it comes to pros and cons, Kaiser Permanente earns points with its strong customer service, HSA options, the variety of health plans they offer, and a plan selection that makes it easy for people to find good health insurance.
The “cons” include their limited coverage areas, though they are expanding a bit in places such as Nevada.
In addition to these five, at JC Lewis Insurance, we work with the following health insurance providers for our California customers (in alphabetical order):
- Blue Shield of California
- Centene/Health Net
- Sutter Health Plus
- Western Health Advantage
Your Local Health Insurance Company Experts
JC Lewis Insurance, a family-owned firm of expert brokers based in Sonoma County, offers California health insurance plans only from the leading health insurance carriers licensed to do business in California.
Not only are we expert brokers, but we are also licensed and certified by each of these insurance carriers to offer coverage to individuals, families, and small group employers in addition to Medicare supplemental and prescription drug plans for seniors.
If you are self-employed or your employer doesn’t provide health benefits, an individual or family plan may be the best option for you or you and your family.
And if you’re a business and are looking to purchase medical insurance, you will likely have many questions and concerns. Bring your questions about health coverage insurance and you can be confident that JC Lewis Insurance Services will help you find the right solution.