The medical sector stocks, notably the health insurance carriers, took a major drubbing in 2024 as Medicare Advantage (MA) plans continued to drive higher utilization costs, eating away at profits. These rising costs are illustrated by the medical benefits ratio (MBR), benefits expense ratio (BER), medical care ratio (MCR) or medical loss ratio (MLR), which is the percentage of premiums used to pay for medical services.
The Centers for Medicaid and Medicare Services (CMS) mandate a minimum MLR of 85%, but the higher the MLR ratio rises, the smaller the profits get. In 2025, health insurers are some of the market's best-performing stocks as they are tariff-free and recession-resistant. Here are 2 health insurers that are outperforming the benchmark indices that could continue to thrive in 2025.
