Direct Answer
7 SEC filers are classified under the Standard Industrial Classification code that describes the medicare advantage industry, and their latest annual reports show $857.5 billion of combined revenue and a median operating margin of 1.7%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics.
Industry Overview
Medicare Advantage plans are private insurance alternatives to traditional Medicare, paid a fixed amount per member by the government adjusted for health risk. Profit depends on risk adjustment, medical cost and star quality ratings. The first numbers to compare across companies here are membership and growth, medical benefit ratio and star ratings.
Key Industry Metrics
- Membership and growth: Number of members enrolled in plans and change over time. Growth lifts revenue, but new members need time and may be costlier at first.
- Medical benefit ratio: Share of premium paid out in medical benefits. A rising ratio reduces profit, and it is sensitive to utilization trends.
- Star ratings: Government quality scores that affect bonus payments and enrollment. Higher ratings add revenue, and drops can reduce it in later years.
- Risk adjustment revenue: Payment increases that reflect how sick members are, based on diagnoses coded. Accurate coding raises payment, but audits can reverse it.
- Margin per member: Profit earned per enrolled member. It combines premium, medical cost and administration, so it is a clean measure of unit economics.
Primary Macro Drivers
- Government rate notices: Each year the government publishes payment rates for private plans, so the notice moves revenue per member and margin more than almost any other event.
- Medical utilization: Visits, procedures and drug use set claims paid per member, so higher use raises the medical benefit ratio against fixed payments.
- Enrollment growth: More people choose private plans over traditional coverage, which raises membership and total premiums, though new members can bring start-up cost.
- Star rating bonuses: Plans with high quality ratings receive bonus payments, which can fund extra benefits and affect margin per member.
Major Risks
- Rate cuts and policy changes: Lower payment rates or changes to benefit rules reduce premiums per member; watch the annual rate notice and policy proposals.
- Rising utilization: When members use more care than plans priced for, the medical benefit ratio rises and margin falls; watch medical benefit ratio and utilization commentary.
- Risk adjustment audits: Audits of diagnosis coding can claw back payments; watch audit notices, legal proceedings and risk adjustment revenue.
- Star rating changes: Losing a bonus tier lowers payments for a year or more; watch star rating announcements and their effect on revenue.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Defensive |
| Capital Intensity | Low |
| Regulatory Intensity | High |
| Industry Maturity | Mature |
| Geographic Importance | U.S. |
Medicare Advantage Filers in the SEC Record
7 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification code 6324. Their latest fiscal years end in 2025, and together they reported $857.5 billion of revenue. Median revenue growth over the prior year was 12.5%. Median operating margin was 1.7% and median net margin 0.9%. Median total liabilities were 73% of total assets, and 4 of 7 reported a profit in their latest year.
| Company | Revenue | Growth | Operating margin | Net margin | Year |
|---|---|---|---|---|---|
| Cigna Group | $274.9 billion | 11.2% | 3.3% | 2.2% | FY 2025 |
| Elevance Health, Inc. | $199.1 billion | 12.5% | 3.6% | 2.8% | FY 2025 |
| Centene Corp | $194.8 billion | 19.4% | -3.9% | -3.4% | FY 2025 |
| Humana Inc | $129.7 billion | 10.1% | 2.1% | 0.9% | FY 2025 |
| Molina Healthcare, Inc. | $45.4 billion | 11.7% | 1.7% | 1.0% | FY 2025 |
| Oscar Health, Inc. | $11.7 billion | 27.5% | -3.4% | -3.8% | FY 2025 |
| Clover Health Investments, Corp. | $1.9 billion | 40.3% | -4.4% | -4.4% | FY 2025 |
Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code.
Where to Go Next
The Medicare Advantage guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company.
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Frequently Asked Questions
What are the main KPIs for the Medicare Advantage industry?
Key performance indicators for the Medicare Advantage industry include: Membership and growth, Medical benefit ratio, Star ratings, Risk adjustment revenue, Margin per member. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Medicare Advantage industry?
The Medicare Advantage industry is generally defensive, meaning demand tends to remain relatively stable regardless of the economic cycle. Companies in this space can provide portfolio stability during recessions, though growth may lag in strong expansions.
What are the biggest risks in the Medicare Advantage industry?
The primary risks for Medicare Advantage companies include: Rate cuts and policy changes, Rising utilization, Risk adjustment audits, Star rating changes. Investors should assess each company's exposure to these factors and its track record of navigating them.