‘Rough Ride’ Ahead: Experts Offer Predictions, Advice for Embattled Health Insurers

Jul 25
Jul 25, 2025

The health insurance industry, it seems, is at a crossroads.

Companies big and small are facing policy pressures, from the looming expiration of enhanced Affordable Care Act subsidies to provisions in the “Big Beautiful Bill” that will erode Medicaid enrollment. Financial headwinds are also swirling, with elevated care utilization trends plaguing various business lines and multiple publicly traded insurers cutting their full-year earnings outlooks. And in the months following the killing of UnitedHealthcare CEO Brian Thompson, public resentment of insurers continues to simmer — potentially driving further scrutiny from policymakers.

“For the health insurance industry, it seems to me like there’s no easy money to be found anywhere right now,” says Katherine Hempstead, Ph.D., senior policy adviser at the Robert Wood Johnson Foundation.

In its most recent Healthcare Quarterly Report, Moody’s Ratings offered reasons for both pessimism and optimism.

“For now, our outlook on the sector is negative, reflecting adverse medical cost trends, driven in part by coverage of expensive new drugs such as GLP-1s for weight loss and increasing behavioral health utilization,” the credit rating firm wrote. “Insurers, however, will continue to take steps to boost EBITDA by continuing to exit underperforming markets and redesign plans to reduce benefits and/or increase co-pays.”

For the final issue of Health Plan Weekly, we asked industry experts what they think is in store for insurers in the second half of the year — and what they can do to meet those challenges and prepare for 2026 and beyond.
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Leslie Small

Leslie has been working in journalism since 2009 and reporting on the health care industry since 2014. She has covered the many ups and downs of the Affordable Care Act exchanges, the failed health insurer mega-mergers, and hundreds of other storylines spanning subjects such as Medicaid managed care, Medicare Advantage, employer-sponsored insurance, and prescription drug coverage. As the managing editor of Health Plan Weekly and Radar on Drug Benefits, she writes and edits for both publications while overseeing a small team of reporters who also focus on the managed care sector. Before joining AIS Health, she was a senior editor for the e-newsletter Fierce Health Payer, and she started her career as a copy editor at multiple local newspapers. She graduated with a dual degree in journalism and political science from Penn State University.