In this article, we discuss the top 10 health insurance stocks to buy. If you want to read about some more health insurance stocks, go directly to Top 5 Health Insurance Stocks to Buy.
The health insurance industry has rapidly evolved over the past few years as insurer participation, pricing, and advanced plans drive innovation within the sector. According to a reports by consulting firm McKinsey, 55 new insurers entered the market in 2022, representing a 21% increase over the past year, and marking the highest growth in participation in the industry since 2015, when participation had grown by around 26%. Over the past four years, product offerings have also increased, nearly tripling with half of that growth occurring between 2021 and 2022.
Tech-enabled insurance plans have contributed most to these growth numbers, per data gathered by the consulting firm, led by firms like Oscar and Bright Health. Some of the other prominent names in the insurance sector that have growth catalysts include Humana Inc. (NYSE:HUM), Cigna Corporation (NYSE:CI), and MetLife, Inc. (NYSE:MET). Another interesting trend in the sector is the participation of exclusive provider organization plans. These have quadrupled to 36% as a share of all plan type offerings.
Total health expenditure is expected to continue on an upward trend across the globe for the next five years. This growth is closely correlated with industry revenues in the health insurance world. However, McKinsey has cautioned that macro uncertainty will persist in part because the enhanced premium subsidies created by the American Rescue Plan Act are due to expire at the end of 2022. If these subsidies are not renewed, pricing and consumer participation may face headwinds in the coming months.
The companies that operate in the health insurance sector were selected