Investing in companies that offer essential products and services can be a smart wealth-building strategy. Like it or not, health insurance ranks as one of the most important necessities for Americans today.
What are the top health insurance stocks to watch? What do you need to know before investing in them? As the major health insurers might say, “We've got you covered.”

Top health insurance stocks
Top health insurance stocks for 2025
Here are four publicly traded health insurance companies and one exchange-traded fund (ETF) likely to perform well over the long term:
1. UnitedHealth Group
UnitedHealth Group (UNH 2.14%) ranks as the biggest health insurer in the world by far. Its UnitedHealthcare business unit offers health plans for employers and individuals and is also a major player in the markets for Medicare Advantage, Medicare supplemental plans, and Medicaid.
The company's Optum business segment provides information- and technology-enabled health services, including OptumRx pharmacy benefits management (PBM) services. While UnitedHealthcare generates around three-fourths of the company’s total revenue, Optum is the bigger growth driver for UnitedHealth Group.
Some of UnitedHealth Group's growth in recent years has been driven by acquisitions. For example, the big healthcare company acquired Change Healthcare in October 2022. However, UnitedHealth Group sometimes faces pushback on its dealmaking activity. The U.S. Department of Justice is trying to block UnitedHealth's purchase of home health and hospice provider Amedisys (AMED 0.22%).
2. Elevance Health
Although Elevance Health (ELV 2.21%) is only a fraction of the size of UnitedHealth Group in terms of market capitalization, it's still one of the largest health insurers. Elevance, formerly known as Anthem, operates Blue Cross and/or Blue Shield plans in 14 states but is licensed to sell health insurance throughout the country.
It competes in the same arenas as UnitedHealth Group, with offerings that include employer-sponsored and individual health plans, Medicare Advantage, Medicare supplements, and Medicaid. Elevance Health's other businesses include pharmacy benefits manager CarelonRx and Carelon Services, which provides healthcare services that include behavioral health, health and wellness programs, integrated care delivery, palliative care, and utilization management.
Elevance's health benefits segment, which includes the company's individual, employer group, BlueCard, Medicare, Medicaid, and federal health businesses, generates around 88% of total revenue. However, Carelon Services is its fastest-growing unit.
3. CVS Health
You might think of CVS Health (CVS 2.05%) as just a pharmacy retailer, but the company also runs CVS Caremark, one of the largest PBMs in the country. Thanks to its 2018 acquisition of Aetna, CVS Health is a top health insurer, too.
The company's healthcare benefits segment, which consists mainly of Aetna, generates more than one-third of CVS' total revenue. The segment's revenue has grown rapidly, driven primarily by its Medicare and commercial insurance products.
Although most of these top health insurance companies pay dividends, CVS Health offers the most attractive dividend yield in the group.
4. Centene
Centene (CNC 1.84%) focuses largely on the Medicaid market. Traditional participants (including those in the Children's Health Insurance Program and Temporary Assistance for Needy Families program) and participants who need frequent monitoring make up more than half of the company's total membership base. Centene's Medicaid plans generate a little less than two-thirds of the company's total revenue.
Medicaid remains a solid business for Centene. However, its commercial insurance revenue is increasing at a much faster rate. The company's Medicare revenue also continues to grow modestly.
Centene is especially targeting two areas for future growth -- individuals who are eligible for both Medicare and Medicaid (known as dual eligibles) and the Individual Coverage Health Reimbursement Arrangement (ICHRA), which is an alternative to group insurance.
5. iShares U.S. Healthcare Providers ETF
One way to scoop up shares of these top health insurance stocks -- plus others -- is to buy shares in an ETF. Although no ETF focuses solely on health insurers, the iShares U.S. Healthcare Providers ETF (IHF 2.42%) comes close.
The ETF tracks the performance of the Dow Jones U.S. Select Healthcare Providers Index, which includes U.S. companies that provide health insurance, diagnostics, and specialized treatment. UnitedHealth Group, Elevance Health, Cigna (CI 1.47%), and Centene are the four largest holdings of this fund, which also owns significant positions in other leading health insurers, including CVS Health and Humana (HUM 4.54%).
There are two primary downsides to buying the iShares U.S. Healthcare Providers ETF compared to investing directly in the top health insurance stocks. First, if your goal is to invest only in health insurance, the ETF isn't a good fit because of its other holdings. Second, you'll have to pay annual expense fees. The iShares U.S. Healthcare Providers ETF's expense ratio is currently 0.4%.
What to look for
What to look for in health insurance stocks
There are some metrics, such as revenue and earnings growth, that you should evaluate no matter what kind of stock you're buying. There are also a few specific factors to consider when you're choosing health insurance companies on the stock market:
- Revenue mix: Understanding a company's revenue mix -- how it generates most of its revenue -- can give you a better idea of its growth prospects and weaknesses. Some health insurers generate most of their revenue from Medicare Advantage, while others are more heavily focused on Medicaid or commercial markets.
- Medical care ratio (MCR): Also sometimes referred to as the benefit expense ratio, medical cost ratio, medical loss ratio, or medical benefit ratio, this metric measures medical costs as a percentage of premium revenue. The higher the MCR, the less profitable the health insurer.
- Diversification beyond health insurance: It's increasingly common for health insurers to diversify into other businesses (and for other businesses to diversify into health insurance). That's been the case with several of the companies on our list, especially UnitedHealth Group and CVS Health. Pay close attention to health insurers' other areas of focus since they can significantly affect a company's growth prospects and associated risks.
Risks
Risks for health insurance companies
Like all businesses, healthcare companies face risks, including economic downturns and rising competition. However, health insurance companies also have a few unique risks, including those related to:
- Regulatory changes: The health insurance industry is highly regulated at the federal and state levels. The potential for major regulatory changes that cause challenges for health insurers is an ongoing risk. For example, if the U.S. implemented a single-payer health plan in the future, health insurers would likely see many of their business opportunities vanish. It's also possible that future presidential administrations could curtail federal funding for Medicare and Medicaid.
- Reimbursement pressure: Even without major regulatory changes, health insurers continually face potential pressures related to reimbursement rates that can significantly alter their profits. Companies must secure approvals for insurance premiums from state regulators, who can be reluctant to pass on higher costs to their states' residents. Medicare and Medicaid programs also set reimbursement rates that can hurt health insurers' bottom lines.
- Unforeseen medical costs: Health insurers set their monthly or annual rates based on expected medical costs, and there's always the possibility that medical costs could be much higher than anticipated. For example, some major health insurers have noted modest increases in costs due to COVID-19.
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Opportunities
Opportunities ahead for health insurers
Even with the risks health insurers face, major opportunities lie ahead. As baby boomers age, demand for Medicare Advantage and Medicare supplemental plans is increasing. The second Trump administration could especially promote Medicare Advantage plans.
FAQ
Health Insurance Stock FAQ
What are the best health insurance stocks?
These three companies are some of the best in the health insurance industry:
- UnitedHealth Group ranks as the biggest health insurer in the world by far. Its UnitedHealthcare business unit offers health plans for employers and individuals and is also a major player in the markets for Medicare Advantage, Medicare supplemental plans, and Medicaid.
- Elevance Health, formerly known as Anthem, is less than one-fourth the size of UnitedHealth Group in terms of market capitalization, but it's still one of the largest health insurers. Elevance operates Blue Cross and/or Blue Shield plans in 14 states but is licensed to sell health insurance throughout the country.
- CVS Health is not just a pharmacy retailer; it also runs CVS Caremark, one of the largest PBMs in the country. Thanks to its acquisition of Aetna in 2018, CVS Health is a top health insurer, too.
Are health insurance stocks risky?
Like all businesses, health insurers face risks, including economic downturns and rising competition. However, health insurance companies also have a few unique risks, including those related to regulatory changes, reimbursement pressure, and unforeseen medical costs.
How do insurance companies make money?
Insurance companies make money by both charging premiums and investing the insurance premium payments. Sounds simple, right? It both is and isn't. Every insurer makes a significant portion of its revenue by underwriting. Companies put some aside in reserve to ensure that they'll have enough to pay all claims anticipated, but then they invest the rest of the money.