The health insurance industry is undergoing profound changes, with significant shifts in how Americans obtain coverage. These changes reveal broader trends in healthcare delivery and financing, shaping the opportunities and challenges for value-based care organizations like MPOWERHealth.
The Decline of Fully Insured Plans
Enrollment in fully insured group health plans has been steadily declining, with a 3% decrease in 2024 to 50 million people. Once a dominant model for employer-sponsored health coverage, fully insured plans now represent a fraction of the market, covering only one-third as many people as self-funded plans. This trend reflects employers' growing preference for flexibility and cost control, which are difficult to achieve under state-regulated, fully insured plans.
The Rise of Self-Funded Plans
Self-funded health plans have emerged as the dominant model for employer-sponsored insurance, now covering 132 million Americans—a 1.8% increase from 2023. These plans allow employers to bypass state insurance mandates, leveraging ERISA’s federal oversight for greater autonomy and cost predictability.
At MPOWERHealth, we actively partner with self-funded employers to meet their unique needs. Through bundled surgical episodes, care navigation, and telehealth solutions, we help employers optimize healthcare delivery, reduce costs, and improve employee health outcomes.
Growth in Individual Market Coverage
Individual health insurance plans, including those offered through the ACA Marketplaces, have also experienced notable growth. Enrollment in the individual market rose by 23% in 2024 to 25 million people. Enhanced subsidies and mechanisms like Individual Coverage Health Reimbursement Arrangements (ICHRA) have made individual plans more attractive to both employers and employees.
This shift indicates a growing segmentation of health coverage, with employees in nontraditional work arrangements or smaller firms increasingly seeking coverage through individual plans.
Medicaid and Federal Program Changes
The expiration of COVID-19 pandemic-era Medicaid provisions has led to a decrease in Medicaid enrollment. Many individuals transitioning out of Medicaid have turned to ACA Marketplaces or individual plans for coverage, further contributing to the growth of these segments.
What These Trends Mean for the Industry
The fragmentation of health insurance coverage presents both challenges and opportunities for providers, employers, and payors. Employers are taking on greater risk and responsibility through self-funded plans, necessitating robust solutions for cost management and quality improvement. The individual market's growth reflects increased consumer choice but also heightened competition among payors and providers.
For MPOWERHealth, these trends affirm the need to focus on value-based care models that address cost, quality, and access. By integrating technology, analytics, and care coordination, we empower employers, payors, and patients to navigate the evolving landscape effectively.
A Future of Innovation and Adaptation
The shifts in health insurance coverage highlight the need for innovative solutions that adapt to a dynamic market. As fully insured plans decline, self-funded plans grow, and the individual market evolves, healthcare organizations must embrace flexible, data-driven strategies to deliver value.
MPOWERHealth is committed to leading in this environment by supporting stakeholders across the spectrum. Whether partnering with self-funded employers, enhancing care delivery for individual market participants, or addressing systemic challenges in healthcare, we are positioned to drive meaningful outcomes in a rapidly changing industry.
By staying attuned to these trends, we ensure that our solutions remain relevant and impactful, ultimately advancing the goals of value-based care and improving the health and well-being of the populations we serve.