More Folks Are Covered by Health Insurance Despite Rise in Self-Funded Plans

Health insurance companies such as Blue Cross Blue Shield (BCBS) members, their parent organizations and subsidiaries provided fully insured coverage for approximately 186.5 million people in the U.S. in 2024, marking an increase of over 12.3 million since 2020, according to a recent report from Mark Farrah Associates (MFA).

BCBS plans accounted for about 37.5% of the total fully insured health insurance market, the report noted.

Reviewed were enrollment trends in the individual, group, Medicare Advantage and Medicaid branches for BCBS and non-BCBS companies from the fourth quarter of 2020 through 2024.

Enrollment data revealed that fully insured health plans outside of BCBS grew from 122.5 million members in 2020 to a peak of 135.4 million in 2022 but then declined to about 131.4 million in 2024.

In addition, BCBS plans increased their enrollment from 51.7 million in 2020 to over 56.7 million in 2022 before dipping slightly to 55.2 million by 2024.

Together, these figures represent a roughly 7% increase, or 12.3 million new members, in fully insured coverage over five years.

While fully insured enrollment has shown growth, the report also highlighted that a significant portion of employer-sponsored health coverage operates differently.

According to the 2024 Kaiser Permanente Employer Health Benefits Survey, a majority of covered workers—63% overall—are enrolled in self-funded health plans, where employers pay directly for healthcare costs instead of purchasing insurance from a carrier.

This trend is particularly strong among large employers, with 79% of their covered workers in self-funded plans, compared to 20% among small firms.

The portion of self-funded coverage has remained consistent compared to last year, reflecting an ongoing preference among many employers for this approach to managing healthcare costs.

Returning to fully insured plan segments, the individual market has seen much growth.

In the latest report, BCBS companies reported a 36.6% increase in individual enrollment over the five-year period, adding nearly 2.5 million members to reach over 9.2 million in 2024.

Non-BCBS companies saw an even larger 106.1% rise, with total enrollment surpassing 16.2 million.

However, the group segment has faced consistent declines.

For example, BCBS plans lost about 1.2 million members (-4.6%), and non-BCBS plans lost over 3.8 million (-13.6%) between 2020 and 2024. As a result, 2024 group enrollment stood at approximately 25.4 million for BCBS and 24.5 million for non-BCBS insurers.

Medicare Advantage enrollment has increased significantly in both sectors.

It was revealed that BCBS companies grew by 32.8%, adding 1.3 million members for a total of about 5.3 million in 2024, while non-BCBS Medicare Advantage plans expanded by 32.3%, adding over 6.8 million members to reach 28.2 million.

Medicaid enrollment showed mixed results: BCBS plans experienced a 6.7% growth with nearly one million new members since 2020, but non-BCBS Medicaid plans saw a 3.9% decline, losing about 2.5 million members.

This drop reflects a broader reduction in Medicaid enrollment following the end of the public health emergency in 2023, which led to the disenrollment of many beneficiaries.

Overall, key dynamics in the U.S. health insurance market were spotlighted, where fully insured plans continue to grow in certain segments while other segments experience declines.

The data analyzed for this report was sourced from Mark Farrah Associates’ Health Coverage Portal, using data from information reported by insurers to the National Association of Insurance Commissioners (NAIC) and the California Department of Managed Health Care (CA DMHC).

Future research that includes both fully insured and self-funded populations is suggested for a more complete picture of employer-sponsored health coverage and market shifts in the coming years.