Health Insurance and Managed Care

In the United States, health insurance is both a financial product and a care-management business. Insurers price risk, build provider networks, negotiate prices, process billions of claims and decide which care they will pay for, and the largest of them now also own doctors, pharmacies, PBMs and data businesses. Private health insurance pays for roughly a third of personal health care spending, and about half of Americans get coverage through an employer. Most of those covered workers (roughly six in ten or more) are in self-funded plans, where the "insurer" is really an administrator paid a fee and the employer carries the risk. This section explains the commercial market (fully insured vs ASO, the medical loss ratio, networks and utilization management), the Blue Cross Blue Shield system, the ACA exchanges, the underwriting cycle, the 2020s insurtech wave, and the 2024–26 period in which several large insurers withdrew earnings guidance as medical costs ran ahead of premiums. Government programs (Medicare Advantage, Medicaid managed care) are covered in 04.