In 2013 alone, the largest 125 U.S. health payers collected nearly $744 billion in premiums. Of these 125 health insurers, the top 25 largest payers accounted for roughly 66 percent of the total market share. UnitedHealth, Kaiser Foundation, Aetna, Anthem, Humana and Blue Cross Blue Shield are among the largest health insurers in the nation, based on data derived from the National Association of Insurance Commissioners, according to U.S. News & World Report.
Here are key points on the largest payers in the United States.
Financial results for Q3 2015
In the third quarter, UnitedHealthcare's revenue reached $32.7 billion, a 9 percent increase from $30 billion in the same period of 2014. The payer's earnings from operation fell 5.7 percent to $1.9 billion compared to the same period the year prior.
Kaiser Foundation Health Plan and Kaiser Foundation Hospitals reported total operating revenue valued at $15.3 billion for the third quarter, an increase from $14.3 billion in the third quarter of 2014. The payer's operating income was $363 million, down from $768 million in the same quarter the year prior. Kaiser's capital spending reached $583 million for the quarter. Although the payer's operating valued increased almost 7 percent year-over-year, the payer ended the third quarter with a $115 million loss.
Aetna's third quarter operating earnings reached $668.6 million, or $1.90 per share, up 6 percent from the third quarter of 2014. The payer's net income was $501.1 million, down from $594.5 million in the same period the year prior. Aetna's operating revenues reached $15 billion for the quarter, a slight increase from $14.7 billion for the third quarter of 2014. Operating expenses were valued at $2.8 billion for the quarter.
Anthem is the largest for-profit managed healthcare company in the Blue Cross and Blue Shield Association. Anthem reported net income of $654.8 million for the third quarter of 2015, or $2.43 per share. The payer's adjusted net income was $2.73 per share, a 9.2 percent increase from the same period in 2014. Operating revenue reached nearly $19.8 million, up almost $1.4 million, or 7.6 percent, from the third quarter of 2014. In the third quarter of 2014, Anthem reported operating revenue of almost $18.4 million. "Our solid third quarter 2015 results reflect continued enrollment growth in both Commercial and Government business segments and our emphasis on driving greater affordability and choice for members," said Joseph Swedish, president and CEO. "We remain firmly focused on driving a differentiated consumer experience and capitalizing on the future opportunities for growth across our markets."
In the third quarter of 2015, Humana reported operating cash flow valued at $1.03 billion. The payer reported diluted earning per common share of $2.09 for the quarter, up from $1.85 from the third quarter of 2015. "Our third quarter results included operating performance for our Medicare businesses that was generally in line with our expectations and continuing momentum in our Healthcare Services segment, but were challenged by our individual commercial business," said Bruce D. Broussard, Humana’s president and CEO.
UnitedHealthcare covers nearly 45 million individuals around the world and offers products on 23 state exchanges. UnitedHealth Group, its parent company, employs nearly 168,000 individuals in 21 countries.
Kaiser Foundation Health Plan is comprised of more than 9.6 million members. The payer serves customers in eight states, as well as the District of Columbia. Kaiser is one of the largest, not-for-profit managed healthcare companies operating in the United States.
Aetna currently covers 23.5 medical members, nearly 14.6 million dental members and approximately 15.3 million pharmacy benefit management service members. The payer's 2015 medical membership fell by 169,000 members, in part, because of the payer's decline commercial insured products. The payer's network reaches nearly 1.1 million healthcare professionals, more than 645,200 primary care physicians and specialists and 5,653 hospitals.
Anthem and its affiliated companies serve more 72 million people, with more than 38 million enrolled in its family of health plans. Anthem companies serve members as the Blue Cross licensee for California; and as the Blue Cross and Blue Shield licensees for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New, Ohio, Virginia and Wisconsin.
Humana had approximately 12 million medical plan members and roughly 7.8 million specialty products members as of Dec. 31, 2013. The payer has medical membership in all 50 states as well as Washington, D.C., and Puerto Rico.
Blue Cross Blue Shield has 228,000 participating physicians, and 570 local patient-centered programs. One in three Americans, or approximately 105 million people, use BCBS companies for healthcare coverage. The Blue Cross and Blue Shield System is comprised of 36 independently operated Blue Cross and Blue Shield member companies, a Federal Employee Program and an Association. The Association owns and manages the Blue Cross and Blue Shield trademarks and names in more than 170 countries and territories around the world.
Pending mergers & acquisitions
In July, Hartford-Conn.-based Aetna entered a definitive agreement to acquire all outstanding Humana shares in a $37 billion deal. Both payers' shareholder approved the million-dollar merger. The companies expect the transaction to close in the second half of 2016. The potential Aetna and Humana merger has faced backlash from many physician groups. In November 2015, The American Medical Association sent a letter to the Department of Justice imploring the agency to ban the recent insurance mega-merger deal. The AMA implores the Department of Justice to block the pending Aetna/Humana merger, claiming the merger would stifle competition.
If Aetna acquires Humana, Humana stockholders will receive $125 in cash and 0.8375 Aetna common shares for each Humana share. The combined entity will have more than 33 million medical members, based on memberships as of March 31, 2015. Stakeholders of both companies approved the acquisition on Oct. 19. Aetna Chairman and CEO Mark Bertolini will serve as chairman and CEO of the combined company.
Anthem entered into a definitive agreement to acquire Cigna in a transaction valued at $54.2 billion. Following the deal's closing, Anthem will have more than $115 million in pro forma annual revenues, and will cover nearly 53 million members. Similar to the Aetna/Humana merger, Anthem's acquisition of Cigna is facing scrutiny from the American Medical Association and other organizations that fear the mergers will eliminate competition in the insurance market.
News from 2015
UnitedHealth is potentially pulling out of the Affordable Care Act due to huge financial losses totaling hundreds of millions of dollars. In October 2015, the payer said it planned to sell coverage through the ACA in 11 more states in 2017. However, the payer will record losses of $275 million in the fourth quarter, which the payer, in part, attributes to its ACA plans. UnitedHealth CEO Stephen Hemsley said the payer made a poor decision by jumping into the ACA's public insurance exchanges. UnitedHealth cut its 2015 earnings forecast, with the payer expecting as much as $500 million in losses on the ACA plans in 2016.
In January 2015, Anthem suffered a data breach that compromised the records of nearly 80 million former and current customers and employees. The breach was one of the largest data breaches disclosed by a healthcare company. The payer discovered the attack on Jan. 29, 2015 when a systems administrator noted database query was running with his identifier code. The affected plans included Anthem Blue Cross, Anthem Blue Cross and Blue Shield, Blue Cross and Blue Shield of Georgia, Empire Blue Cross and Blue Shield, Amerigroup, Caremore, Unicare, Healthlink and DeCare.