Number of pages: 100 | Report Format: PDF | Published date: January 30, 2023
Historical Years – 2020 | Base Year – 2021 | Forecasted Years – 2022-2030
According to the deep-dive market assessment study by Growth Plus Reports, the global health insurance market was valued at US$ 2,048.5 billion in 2021 and is expected to witness a CAGR of 6.19% to reach US$ 3,312.1 billion by 2030
Health Insurance Market Fundamental
Health insurance or medical insurance covers all or a portion of the financial expense/risk associated with an individual’s medical care. Effective health insurance offers protection from the financial strain of medical and healthcare expenses. Certain services, such as hospital stays, doctor visits, prescriptions, and other medical procedures, are covered by health insurance policies. The coverage, deductibles, and rates of various health insurance plans differ. An insurer can create a regular financial structure, such as a monthly premium or payroll tax, to provide the funds to pay for the medical benefits provided in the insurance agreement by assessing the overall risk of health risk and health system expenses over the risk pool.
A central institution, such as a government agency, for-profit corporation, or private company, is in charge of distributing the benefit. In the event of illness or accident, it helps to protect a person's finances and future well-being. The patient’s needs and financial situation determine the sort of health insurance policy selected. Health insurance programs come in a variety of forms, including those offered by employers, the government (such as Medicare and Medicaid), the private sector, and short-term health plans. Each type of policy provides various levels of coverage at different premiums. It is crucial to consider all available possibilities carefully before selecting a strategy that best suits one’s needs.
Health Insurance Market Dynamics
Health and medical coverage are now required due to the rising costs of high-quality healthcare and the increasing need for healthcare coverage brought on by rising income levels, longer life expectancies, and an epidemiological swing toward noncommunicable diseases. The general insurance market is significantly growing thanks in large part to health insurance. The ongoing increase in medical expenses is driving the market for health insurance. As a result, there is a cost shift between employers, insurers, and providers, all trying to find ways to control these expenses. As a means of luring and keeping talented personnel, employers, in particular, have grown more interested in providing employee perks, such as healthcare insurance.
Consequently, there is more competition in the market for health insurance, with businesses vying to provide the greatest coverage at the lowest prices. The requirements and needs of both insurers and consumers drive the health insurance market. While people search for appropriate coverage at the lowest possible cost, insurers work to keep premiums low and earnings high. This results in a delicate balance that is difficult for all parties to maintain since it is continuously moving due to economic, governmental, and technological changes. On the other hand, consumers are becoming more knowledgeable about the many plans that are offered, and healthcare professionals are now frequently evaluated based on the caliber of the care they offer. Significant government initiatives, robust democratic elements, a supportive regulatory environment, increased alliances, product innovations, and dynamic distribution networks are all contributing to the health insurance market's growth. Private health insurance plans are becoming increasingly popular as a way for people to get the medical treatment they need. These plans offer much-needed protection for those who cannot access public health care; however, they vary in coverage and price.
Private insurance plans have grown in popularity recently and offer greater personalization and freedom than government healthcare systems. During the COVID-19 pandemic, there were more cases of several diseases, such as cancer, dengue fever, and diabetes. This is thought to have had a significant positive impact on the growth of the global health insurance industry. Improved claim-handling services and a rise in rural areas’ understanding of health insurance are two other key market expansion drivers.
However, some of the factors that restrict the health insurance market revenue growth opportunity are a lack of awareness of the coverages included within health insurance policies and an increase in the cost of health insurance premiums. Additionally, the cost of medical treatment is anticipated to rise in the next few years, as healthcare professionals use more modern technologies to treat chronic conditions, such as cancer and cardiovascular ailments.
Health Insurance Market Ecosystem
The global health insurance market is analyzed from six perspectives: by service provider, product type, network provider, age group, end-user, and region.
Health Insurance Market by Service Provider
Based on the service provider, the global health insurance market is segmented into private and public.
The public segment dominated the global health insurance market with the highest CAGR in 2021. With a public health insurance option, the government offers a type of health insurance that people may buy to cover their medical expenses. Earlier, the urban poor population relied more on public clinics and hospitals for medical care than private clinics and doctors. Many of the poor and near-poor are still in that situation today as a result of banks, supermarkets, department shops, pharmacies, and hospitals running off inner-city regions where the destitute are concentrated. Also, the government authorities operate health insurance policies on a non-profit basis. They do not have to factor the profit into their premium prices as their objective is to cover their costs rather than make a profit from the service. Furthermore, a very large organization has more clout when negotiating. Better negotiating positions would result in lower costs across the board for healthcare. Thus, public insurance is preferred over private service providers owing to the lower cost and easy accessibility. Additionally, since private insurers would compete with the public option, they would need to cut their premiums and engage in more aggressive haggling.
Health Insurance Market by Product Type
Based on the product type, the global health insurance market is segmented into medical insurance, critical illness insurance, and others.
The medical insurance segment dominated the global health insurance market in 2021. This is explained by several benefits provided by life insurance, such as guaranteed death payout and permanent coverage. Additionally, investing in these plans enables working professionals to save taxes. Moreover, the increased geriatric population, along with a rise in the prevalence of chronic diseases, such as diabetes, cancer, and cardiovascular diseases, are the most important factors driving the demand for health insurance to avail financial security in emergency medical conditions.
Health Insurance Market by Network Provider
Based on the network provider, the global health insurance market is segmented into preferred provider organizations (PPOs), point of services (POS), health maintenance organizations (HMOs), and exclusive provider organizations (EPOs).
The preferred provider organization (PPOs) segment accounted for the largest revenue share of the global health insurance market in 2021. A PPO is a well-liked health insurance option for both individuals and families. PPOs involve networks of health insurance providers and contracted medical personnel. Preferred providers are hospitals and doctors who provide services to the insurer's plan clients at discounted prices. Participants in the plan are granted coverage for out-of-network healthcare providers in addition to receiving the maximum PPO benefit when they see in-network healthcare providers. PPOs provide more flexibility compared to other healthcare plans, even though monthly premiums often are more than those needed for plans such as HMOs. PPO networks can provide contributors in most cities and states due to their size. Participants can benefit from flexibility in provider access or selection in emergency scenarios. Furthermore, PPOs let customers visit any healthcare facility or clinician in their network without needing a referral. A consumer benefits from choosing their own healthcare as they are free to enter any hospital or facility of their own discretion. Thus, the PPOs frequently opt as a beneficial network provider for the global health insurance market.
The point of services (POS) segment has also showcased a significant increase in revenue CAGR in the past few years, due to the lower premium than PPOs.
Health Insurance Market by Age Group
The global health insurance market is segmented into minors, adults, and senior citizens groups based on the age group.
The adults segment accounted for the largest market revenue share of the global health insurance market in 2021. The adult population has a significant prevalence of lifestyle diseases that raise the risk of future health problems. The populace is more susceptible to hospital-requiring illnesses such as cardiac and other ailments.
The senior citizens segment accounted for the second-highest revenue CAGR in the health insurance market. It comprises adults over 65, who are more prone to chronic illnesses and thus have a higher hospitalization rate. Senior health insurance policies are more essential, especially in the event of retirement. Additionally, it offers several benefits, such as lifelong coverage and annual checkups for a price, coverage for the outpatient department, and no medical examination required before purchasing policies.
Health Insurance Market by End-user
Based on the end-user, the global health insurance market is segmented into corporates and individuals.
The individuals segment dominated the global health insurance market in 2021. The demand for personalized health plans has increased in the past few years, as these plans can be customized. Additionally, it does not depend on work status and allows more control over deductibles, copays, and benefit caps. Unlike corporate insurance policies, individual insurance policies offer greater advantages and generate higher premiums, boosting segment revenue growth.
The corporate segment is projected to register revenue CAGR at a profitable rate during the forecast period. This can be attributed to the less expensive nature of business insurance than individual health coverage. Obtaining coverage for pre-existing conditions is simpler, and they provide less expensive coverage for better conditions. However, they only apply while the person is employed with the company.
Health Insurance Market by Region
The global health insurance market is geographically segmented into North America, Europe, Asia-Pacific, and the Rest of the World.
In 2021, North America accounted for a commanding revenue share in the global health insurance market due to the existence of numerous insurance firms that provide health and life insurance products. Additionally, having coverage is required under the American Affordable Care Act. The federal government was supposed to impose sanctions on the states that disobeyed.
The global health insurance market is expected to see profitable revenue growth opportunities in Asia Pacific during the forecast period. The rise in public and private health spending, the penetration of insurance services into rural and urban areas, as well as supportive government policies are expected to fuel the market revenue growth in Asia Pacific. The rapidly expanding middle-class population in developing economies of the region is driving up insurance demand. Moreover, the region's life insurers are shifting away from fee- and protection-based products, emphasizing accident and health insurance.
Health Insurance Market Competitive Landscape
The key companies operating in the global health insurance market are:
Health Insurance Market Strategic Developments
Health insurance, or medical insurance, financially covers all or a portion of the risk connected with a person seeking medical attention. Health insurance is necessary to safeguard one's financial security and that of one's family. It provides protection from the burden of mounting medical and healthcare costs.
During the COVID-19 pandemic, several diseases were reported, including cancer, dengue fever, and diabetes. This is thought to have had a significant positive impact on the growth of the global health insurance market. Improved claim-handling services and a rise in rural areas’ understanding of health insurance are two other key market revenue growth drivers.
CSV Health Corporation (Aetna Inc.), AIA Group Limited, Allianz Care, Assicurazioni Generali S.P.A., and Aviva PLC are among the prominent players operating in the global market.
The lack of awareness about the coverage policies of health insurance plans is the major restricting factor of the global health insurance market revenue growth.
The global health insurance market is expected to register a revenue CAGR of 6.19% during the forecast period from 2022 to 2030.
*Insights on financial performance are subject to the availability of information in the public domain