Health insurance industry profits are projected to fall about 5% to 6% in 2014, hammered by taxes associated with healthcare reform, Medicare Advantage reimbursement cuts, margin pressures in certain commercial lines, and slower than expected exchange implementation, according our soon-to-be-released Outlook for Managed Care 2014.
But the decline in 2014 profits isn’t the whole story. Profit growth will begin to normalize in 2015 and beyond. By then, plans will have digested the initial hits to margins in both the government and individual lines. They will also start to benefit from expanded enrollment in Medicaid, Medicare and individual.