The health insurance sector in the US is currently experiencing significant shifts. The increasing costs of healthcare services, evolving enrollment trends, and technological advancements are some of the key trends driving change and growth in the sector. According to a report by IMARC Group, the US health insurance market was valued at $453 billion in 2024. The market is expected to grow at a compound annual growth rate (CAGR) of 3.7% during 2025-2033 to reach a value of $639 billion by the end of the forecast period.
READ ALSO: 12 Best Medical Stocks To Buy Under $20 and 10 Best Stocks to Buy and Hold For 2025.
In January 2025, the US government proposed significantly increasing the amount that it pays to insurers who offer Medicare Advantage plans. On January 10, Reuters reported that the government has suggested new reimbursement rates for Medicare Advantage plans for 2026, which are run by private insurers. The rate changes proposed could increase payments to private insurance companies by 2.2%. This is a notable change from the 0.2% decrease last year.
The government payment rate impacts how much private insurance companies charge for monthly premiums, the types of benefits insurers offer, and how much insurers can profit. When factoring in a 2.1% risk score, the total payment increase is estimated at 4.3%, or over $21 billion. The risk score adjustment accounts for the possibility of higher payments for patients with severe health conditions.
Private health insurance companies will use the payment rate to prepare bids for contracts for Medicare Advantage plans that they will offer in 2026. Around 65 million individuals are enrolled in the government’s Medicare program which caters to people aged 65 and older or who are disabled. Over half of these individuals are enrolled in Medicare Advantage plans.
Oppenheimer analyst Michael Wiederhorn wrote in a research note that this proposal is very favorable given the contentious political environment. He believes this proposal should positively affect health insurance stocks involved in this space. However, the proposed rate may be changed after feedback from insurers, other organizations, and the public. The final rate announcement is expected to be published on or before April 7, 2025.
With this background in mind, let’s take a look at the 12 best health insurance stocks to buy in 2025.
An insurance agent talking to a customer in their home office about healthcare insurance options.
Methodology
To compile our list of the 12 best health insurance stocks to buy in 2025, we looked for the largest health insurance companies. We also reviewed our own rankings, financial media reports, ETFs, and various online resources to compile a list of the best health insurance stocks. Next, we focused on the top 12 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds. The 12 best health insurance stocks to buy in 2025 are ranked in ascending order based on the number of hedge funds holding stakes in them as of Q3 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12 Best Health Insurance Stocks to Buy in 2025
12. MetLife Inc. (NYSE:MET)
Number of Hedge Fund Holders: 37
MetLife Inc. (NYSE:MET) is a leading global provider of insurance, annuities and employee benefit programs. Through its subsidiaries and affiliates, the corporation has a strong presence in more than 40 markets around the world with leading positions in the US, Japan, Latin America, Asia, Europe, the Middle East, and Africa. MetLife Inc. (NYSE:MET) offers a range of health insurance products, including accident and health insurance, disability insurance, and critical illness insurance. The company also offers dental insurance, vision insurance, and even pet health insurance.
The company’s business strategy focuses on growth and returns. At its 2024 Investor Day in December, MetLife Inc. (NYSE:MET) announced its five-year growth strategy, New Frontier. The company is aiming for double-digit growth in adjusted earnings per share and a 15-17% adjusted return on equity. It also expects to reduce expenses and generate $25 billion in free cash flow. MetLife Inc.’s (NYSE:MET) New Frontier strategy includes plans to expand in high-growth international markets by leveraging its strong position in Latin America and Asia. The company also aims to grow in emerging regions through new distribution methods and product and channel diversification.
The company is also committed to introducing innovative products and services. On February 4, 2025, MetLife Inc. (NYSE:MET) announced that it is expanding its New Hampshire Paid Family Medical Leave (PFML) program with mental health and well-being services. MetLife is the first carrier to offer this service. This program will provide initial clinical assessment and consultation with a therapist and guided support to help workers deal with mental health conditions like anxiety, depression, trauma, grief, and insomnia.
11. Molina Healthcare Inc. (NYSE:MOH)
Number of Hedge Fund Holders: 37
Molina Healthcare Inc. (NYSE:MOH) is a managed care company that ranks among the best health insurance stocks to buy in 2025. The company provides health insurance managed healthcare services under the Medicaid and Medicare programs, and through the state insurance marketplaces. As of December 31, 2024, Molina Healthcare Inc. (NYSE:MOH) served around 5.5 million members. For the full year 2024, the company’s premium revenue was approximately $38.6, marking an increase of 19% compared to the previous year.
The company is focused on a growth strategy that includes organic growth, winning new state contracts, and acquisitions. Molina Healthcare Inc. (NYSE:MOH) expects to meet its target of $46 billion in premium revenue in 2026. Recently, Molina Healthcare Inc. (NYSE:MOH) announced its acquisition of ConnectiCare, effective February 1, 2025. This acquisition adds around 140,000 members across state insurance marketplaces, Medicare, and certain commercial products.
