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The confluence of state and federal politics, the continued emergence from a global pandemic and evolving demographic trends will significantly impact the US accident and health insurance market in 2024 and beyond.

The future shape of the US healthcare system and private insurers’ role within it has rested with the US Congress and in various statehouses since the enactment of the Affordable Care Act in 2010. While the status of the healthcare system has not yet emerged as a primary focus of the 2024 presidential campaign, the outcome of the November elections will have much to say about the federal government’s future role.

Divided government, whether within Congress or between the executive and legislative branches, favors the preservation of the status quo. One-party rule, depending upon who emerges victorious, could lead to outcomes that range at the extremes from a shift toward a single-payer healthcare system to a repeal of the ACA. At the state level, meanwhile, Medicaid expansion has helped fuel outsized premium growth in recent years among the private Medicaid managed care companies who contract with individual jurisdictions to provide coverage to beneficiaries. Two of the three largest states, Florida and Texas, are among the 10 states that have not adopted Medicaid expansion as part of ACA implementation.

The accident and health business includes an extremely diverse range of coverages underwritten by P&C, life and health insurers, but public and private managed healthcare programs account for the lion’s share of premium volume and, as a result, typically drive annual growth rates. Rates of expansion exceeded 8% in each of the past three years, though the annual pace slowed to 8.8% in 2023 from just over 10.0% in 2022.

The consistency of the A&H market’s growth, which includes annual rates of expansion in excess of 5% in each of the 10 years since major ACA provisions took effect at the start of 2014, has been impressive and unique among major US insurance sectors. But we do not expect that it will persist in perpetuity. Premium growth rates remained in the high-single digits in the first quarter of 2024, but signs of potential future strain also began to emerge, casting some doubt on whether expansion can continue at an elevated pace over the near- to intermediate-term

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