Health insurers will step off the roller coaster in 2025

Health insurers will step off the roller coaster in 2025


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Health insurers had a tumultuous 2024. The industry was buffeted by sweeping policy changes that pressured reimbursement, while higher medical utilization drove costs up. And by year’s end, payers found themselves engulfed in a firestorm of public anger over controversial business practices.

The challenges slammed insurers’ value on Wall Street. Stocks in managed care companies significantly underperformed the rest of the market last year, falling about 13% compared to 23% growth for the S&P 500.

But things are looking up for payers in 2025, according to experts. The policy backdrop should improve with the advent of President-elect Donald Trump’s administration, which is expected to be much friendlier to business than the Biden administration.

In particular, the regime change should benefit insurers peddling once-lucrative privatized Medicare plans — though, payers might still slash benefits in Medicare Advantage plans this year as they hustle to recoup profits, experts say.

However, actions from the incoming administration to cut funding for Medicaid and the Affordable Care Act exchanges could be negative for payers. There’s also significant uncertainty as to the Trump administration’s priorities in healthcare, stemming mostly from the president-elect’s unconventional picks for top health policy roles.

“I think we all thought okay, once the election’s over, there’s no more overhang. It’s all guns ablazing one way or another. But there’s still going to be a little bit of the same wait and see,” Daniel Gorlin, the global lead of Boston Consulting Group’s payer and provider business, said.

Ripple effects from the shocking killing of an insurance executive last year have also laid bare for payers the need to improve consumer trust, and experts believe they’ll invest significant resources into that effort in 2025. In addition, access to in-demand weight loss drugs should increase this year as the Trump administration faces a weighty decision on Medicare coverage.

Here are the biggest predictions for health insurers in 2025.

Brian Thompson’s death will amplify concerns about trust — and accelerate insurer efforts to improve it

The brazen shooting of UnitedHealthcare CEO Brian Thompson in December set off a national conversation about health insurers’ tactics to cut spending that occasionally prevent necessary medical care.

Thompson’s death, and the furor it sparked, will spur insurers to increase consumer trust this year — while keeping state and federal lawmakers focused on reforming the industry, according to experts.

The shooting “shines a brighter light, unfortunately, on some of the shortcomings, candidly, of health insurers,” said Arielle Trzcinski, a principal analyst in Forrester’s healthcare division.

Trust in insurers has steadily declined in recent years, with just 56% of consumers agreeing last year that they trust their insurer will do what’s best for its customers, according to research from the consultancy.

A headshot of Brian Thompson, the late CEO of UnitedHealthcare

Brian Thompson, the late CEO of UnitedHealthcare

Courtesy of UnitedHealth

Many factors have contributed to eroding trust. Along with issues like surprise medical bills and denied medical care, major problems include disjointed and confusing processes that make it difficult for members to access information about their coverage, communicate with their insurer, pay bills and more, experts said.

“These are core basics. We need some health insurers to go back to the fundamentals and ensure they are doing those things well,” Trzcinski said.

To increase confidence, insurers will move away from transactional engagement with their members to a more proactive and ongoing relationship, according to the analyst. That includes investing in data and technology to better understand members’ health needs, along with educational content and engagement models to help members navigate benefits more easily.


“We need some health insurers to go back to the fundamentals and ensure they are doing those things well.”

Arielle Trzcinski

Principal analyst, Forrester


“The more that we can focus on simplifying experiences to understanding coverage and all the nuances of that is what we’re recommending payers invest dollars in right now,” said Ben Baenen, a healthcare partner at consulting firm West Monroe. “[Thompson’s death] is so unbelievably horrific and tragic. But at least, at a minimum, it’s acknowledging that there is friction with the ecosystem of people understanding what their coverage provides.”

Despite the backlash, it’s unlikely insurers will stop using algorithms to review claims for medical necessity and manage medical utilization — a key gripe of consumer advocates and some lawmakers in Washington, who point to a correlation between uptake of the technology and rising care denial rates.



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