MCMURRAY, Pa.--(BUSINESS WIRE)--Mark Farrah Associates (MFA), www.markfarrah.com, released an analysis brief providing insights into mid-year profitability for commercial and government lines of health insurance business. MFA compared second quarter, year-over-year profitability for the Individual, Employer-Group, Medicare and managed Medicaid segments. Financial insights were gleaned from aggregated 2Q16 and 2Q17 National Association of Insurance Commissioners (NAIC) statutory financial data from MFA’s Health Coverage Portal™.
Determining the medical loss/expense ratio is a common industry measure used to assess health plan profitability. This ratio, health care costs/claims incurred divided by premiums earned, indicates the amount of premium dollars spent on medical expenses. The higher the ratio, the less room there is for the plan to pay for its administrative costs, potentially impacting profitability. In "Improved Profitability for the Individual Health Insurance Sector and Other Segment Insights," Mark Farrah Associates reported segment profitability for mid-year 2017 showed some improvement for the Individual market. The Group and Medicare segments remained relatively stable in terms of profitability; however, Medicaid experienced a slight profitability decrease between 2Q16 and 2Q17.
At the end of second quarter 2017, the top five health plans in the Individual segment reported improved medical expense ratios. The average medical expense ratio for this segment was 77%, as compared to 89% the previous year. The slight 1% growth in premiums for the Group segment pushed the average medical expense ratio down to 81.8% for 2Q17 from 82.3% in 2Q16. For Medicare, the 7.7% increase in medical expenses pushed the medical expense ratio up to 85.7%. Lastly, the 13.3% increase in medical expenses pushed the medical expense ratio for Medicaid up to 91% from 87.4% in 2Q16.
The need for health plan market share and financial performance data is in high demand as the precarious state of the industry remains unsettled. Many issuers and industry experts alike use Mark Farrah Associates’ Health Coverage Portal™ to assess enrollment and performance metrics across all health insurance segments. MFA will continue to regularly report on interesting updates about health insurance enrollment, performance and competition. To read the full text of "Improved Profitability for the Individual Health Insurance Sector and Other Segment Insights," visit the Analysis Briefs library on Mark Farrah Associates' website.
About Mark Farrah Associates (MFA)
MFA is a leading data aggregator and publisher providing health plan market data and analysis tools for the healthcare industry. Committed to simplifying analysis of health insurance business, our products include Medicare Business Online™, Medicare Benefits Analyzer™, Health Coverage Portal™, County Health Coverage™, and Health Plans USA™.
