U.S. Individual Health Insurance Market Soars to New Levels

August 1st, 2024

1 min read

As of the first quarter of 2024, the U.S. individual health insurance market has reached unprecedented heights, with enrollment totaling approximately 24.3 million. This marks a significant increase of 4.9 million enrollees from the previous year, driven by several factors including regulatory changes and the aftermath of the COVID-19 pandemic.

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The passage and implementation of the Affordable Care Act (ACA) initially spurred enrollment, though it faced declines due to legal challenges and policy changes. Since the end of the COVID-19 Public Health Emergency in May 2023, enrollment has surged, partly due to individuals transitioning from Medicaid to subsidized individual plans and the rising popularity of Individual Coverage Health Reimbursement Arrangements (ICHRAs).

Despite these gains, insurers face financial challenges with premium growth struggling to keep pace with rising medical expenses, leading to shifts in market participation. The average premiums per member per month (PMPM) increased to $542 in 1Q24, while claims rose to $427 PMPM, reflecting a market attempting to balance growth with cost management.