These top
five health insurance payers hold the largest net revenue and members.
April 13, 2017 - The Affordable Care Act has been a
divisive policy for the public and politicians, but since 2010 it has been a
financial boon for the top five giants of the health insurance payer
industry.
The expanding customer base created by the ACA, along with
higher returns for investors, have pushed revenues and membership for the ‘Big
Five’ to year after year gains.
Even though some healthcare payers are pulling out of the state exchanges, others have
made plans to expand into new ones, or even into verticals such as dental,
government, pharmacy and global.
The recent flurry of merger and acquisition talks has brought up
questions about monopolies and legal challenges, but outlooks for these ‘Big
Five’ stocks are solid. The current year to date (YTD) stock value gains
show investors’ confidence in a profitable healthcare payer business structure
for the future.
Based on data from April of 2017, here is a rundown of the
top five largest health insurance payers in the US.
1.United Health Group
2016 Net
Revenues: $184.8B
Subscribers:
70 million
YTD NYSE:
+3.62
Rev Growth
(3 yr avg): +14.7
United Health Group incorporates a network of
over 1 million physicians and 6,000 hospitals. Optum, its
integrated information and technology platform, is in use in 4 out of 5
hospitals in the US, serving 115 million individuals and close to 300 health
plans. This includes Optum Rx, the pharmacy care service, which works
with CMS and private groups in 67,000 pharmacies across the nation.
2. Anthem (formerly Wellpoint-Anthem)
2016 Net
Revenues: $89.1 B
Subscribers:
39.9 million
YTD NYSE:
+16.46
Rev Growth
(3 yr avg): +6.1
As Anthem continues with it stalled attempt to merger
with Cigna , the carrier has continued to maintain its presence as the nation’s
second largest health payer.
“Our fourth quarter 2016 core earnings and financial metrics
tracked well versus our expectations,” said Joseph Swedish, president and CEO
in a recent statement. “We are well positioned for a successful 2017,
building off of improved business momentum in the second half of 2016."
3. Aetna
2016 Net
Revenues: $63.1B
Subscribers:
23.1 million
YTD NYSE: +
4.44
Rev Growth
(3 yr avg): +10.1
Formed in 1853, this Hartford, Connecticut based insurer has
always had an eye for growth and expanding markets. In 2013 it acquired
Coventry Health Care, substantially boosting its membership base.
In 2014 Aetna went global by acquiring UK based InterGlobal
Group giving it an entry to private health insurance markets throughout Asia,
Africa, Europe and the Middle East. However, 2015 brought a failed
attempt to take over one of its chief competitors, Humana. Since then,
Aetna has withdrawn from many of the state ACA markets.
4. Humana
2016 Net
Revenues: $54.3B
Subscribers:
14.2 million
YTD NYSE:
+4.35
Rev Growth
(3 yr avg): +9.6
Founded in 1961 in Louisville, KY, Humana was originally a long-term care provider
that grew into a health industry giant. Humana sold its LTC empire in
1974 and built a network of investor-owned hospitals. Today, Humana operates a
provider network of approximately 50,000 associates across the country.
According to the company’s mission statement, Humana has made a commitment to
make every community it serves 20 percent healthier by 2020 by providing people
easy access to better healthcare.
5. Cigna
2016 Net
Revenues: $39.7B
Subscribers:
15 million
YTD NYSE:
+13.63
Rev Growth
(3 yr avg): +7.0
Formed by a merger in 1982 between the INA Corporation and
Connecticut General Corporation, this global health service company has found success while incorporating dental and
Medicare verticals, offering Medicare prescription plans in all 50 states.
From 2008 to the present, Cigna has continued to expand its
services to different regions of the US and internationally. Cigna was
ranked 90 on the 2015 Fortune 500 list.
Editor’s
note: Net revenue and membership data
was collected from the companies 2016 financials and shareholder filings.
Current NYSE data by Morningstar.
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