The U.S. health insurance industry, referred to as Health Maintenance Organization (HMO), is poised to benefit from expanding commercial plans suite, which offers higher margins and reduced regulatory risk, while also leveraging favorable financing conditions from 2025 expected interest rate cuts to pursue mergers and acquisitions (M&A). Medicare Advantage rate hikes expected in 2026 are likely to provide additional margin support.
However, profitability remains under pressure from rising medical costs linked to deferred care, greater utilization, chronic conditions and expensive specialty drugs such as biologics and cancer therapies. Further challenges arise from regulatory uncertainty surrounding Medicaid funding reductions and changes to ACA subsidies. Despite these hurdles, companies like The Cigna Group and Humana Inc. appears well-placed to counter industry headwinds. ARTICLE