AM Best has revised its outlook for the U.S. health insurance market from stable to negative.
The rating agency attributes the downgrade to a broad increase in medical costs, a rise in hospital admissions and emergency room visits, and a growing volume of claims related to behavioral health disorders.
Health insurers’ quarterly results for 2025 have been affected by higher-than-expected use of medical and pharmaceutical services, as well as increased claims linked to influenza, COVID-19, and pneumonia.
AM Best also cited sustained pressure on the operating margins of government-sponsored health plans, along with a general decline in market-wide profitability, as key factors behind the decision.