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.
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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.
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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.
10. Oscar Health Inc. (NYSE:OSCR)
Number of Hedge Fund Holders: 45
Oscar Health Inc. (NYSE:OSCR) is an American health insurance and healthcare technology company. Through its +Oscar platform, the company offers health insurance plans to individuals and families and health technology solutions to support the healthcare industry. Oscar Health Inc. (NYSE:OSCR) ranks among the best health insurance stocks to buy in 2025.
Following the 2025 open enrollment period, the company is now one of the largest carriers of Affordable Care Act (ACA) plans. Overall, the individual market grew 13% year-over-year to reach a record 24 million individuals. With a 37% increase, Oscar Health Inc.’s (NYSE:OSCR) growth outpaced the market by close to 3 times. As of February 1, 2025, the company is serving 1.8 million members. This success is driven by competitively priced products, technology, and a superior member experience across the company’s 18-state footprint.
A key area of focus for Oscar Health Inc. (NYSE:OSCR) is the use of Artificial Intelligence (AI) to personalize clinical care and improve overall efficiency. The integration of large language models is enhancing capabilities such as follow-up care and AI-powered post-care instructions in Oscar Urgent Care. Oscar Health Inc. (NYSE:OSCR) continues to deploy new applications and tools while the company’s technology platform continues to drive member engagement.
9. Chubb Limited (NYSE:CB)
Number of Hedge Fund Holders: 51
Chubb Limited (NYSE:CB) is an insurance company that is headquartered in Switzerland and has operations in 54 countries and territories. The company offers a range of insurance products, including property and casualty, accident and health, life, and reinsurance. Chubb Limited’s (NYSE:CB) Health Shield insurance plan covers primary health benefits and needs and caters to individuals and families. For businesses, the company offers accident and health insurance and supplementary health insurance in the form of Hospital Cash Benefit. According to hedge funds, CB ranks among the best health insurance stocks to buy.
The London Company, an investment management company, has a positive outlook on Chubb Limited (NYSE:CB). In its “The London Company Large Cap Strategy” third quarter 2024 investor letter, the investment management firm noted that while the company is based outside the US, around two-thirds of its earnings are generated in the US, with Asian markets contributing another 20%. The London Company is drawn to Chubb Limited’s (NYSE:CB) globally diversified business model. The insurance company has a portfolio of top-performing businesses that have substantial scale and yet there is potential for growth.
Chubb Limited (NYSE:CB) has excellent underwriting standards and a strong track record of effective cost management. The London Company noted the insurance company’s consistent profitability and potential for growth in the Asian markets. The investment management firm believes that Chubb Limited (NYSE:CB) has the potential to benefit from rising interest rates in its investment portfolio.
8. Centene Corporation (NYSE:CNC)
Number of Hedge Fund Holders: 51
Centene Corporation (NYSE:CNC) is an American insurance company that provides government-sponsored and privately insured healthcare programs. The corporation provides a wide range of managed healthcare products and services, primarily through Medicaid, Medicare, and commercial products. The commercial segment provides health plan plan coverage to individuals and large and small employer groups. Centene Corporation (NYSE:CNC) is one of the best health insurance stocks to buy in 2025.
Oakmark Fund, advised by Harris Associates, discussed Centene Corporation (NYSE:CNC) in its Q4 2024 investor letter and noted that despite the company releasing resilient third-quarter 2024 results in the face of short-term industry pressure, its stock price still declined in Q4 2024. At its investor day in December 2024, Centene Corporation (NYSE:CNC) also gave above-consensus guidance for 2025 earnings per share (EPS). The fund believes that investor concern about how new laws after the US presidential election could affect the company was the main reason for the stock’s decline. Oakmark Fund believes that CNC has a lot of embedded earnings power to drive continued EPS growth, even if the political environment is not so favorable.
Centene Corporation (NYSE:CNC) presents a compelling investment opportunity. In its fourth quarter 2024 investor letter, Oakmark Fund also pointed out that Centene Corporation’s (NYSE:CNC) shares are trading at less than 9 times the 2025 EPS guidance, which is an attractive valuation for a company with strong returns on capital that operates in a growing industry.
7. Humana Inc. (NYSE:HUM)
Number of Hedge Fund Holders: 60
Humana Inc. (NYSE:HUM) is one of the largest health insurance providers in the US. It offers health insurance and medical plans and serves people with Medicare and Medicaid plans, families, individuals, and military service personnel. According to hedge funds, Humana Inc. (NYSE:HUM) is one of the best health insurance stocks to buy in 2025.
The company is strategically investing in the business to reduce costs, improve overall efficiency, and enhance health outcomes. In the Q3 2024 earnings call, Humana Inc.’s (NYSE:HUM) management pointed out that the company is making investments in technology and implementing new use cases for artificial intelligence (AI). The company made improvements to its plan finder capability. Humana Inc. (NYSE:HUM) also recently launched a generative AI tool that helps the care management team spend less time on post-call documentation to improve efficiency. The company is also actively working to enhance its Medicare Advantage offerings to improve member satisfaction and retention.
PGIM Jennison Health Sciences Fund discussed Humana Inc. (NYSE:HUM) in its third-quarter 2024 investor letter. The letter noted that Humana Inc. (NYSE:HUM) is one of the biggest providers of Medicare Advantage plans, which is the fastest-growing segment of the US health insurance market. The company’s strategy revolves around lowering costs and improving healthcare for seniors. The fund believes that Humana Inc. (NYSE:HUM) is well-positioned to benefit from the rise in demand for private Medicare plans, which are becoming more popular because of the aging population in the US.
6. The Allstate Corporation (NYSE:ALL)
Number of Hedge Fund Holders: 62
The Allstate Corporation (NYSE:ALL) is an American insurance company that ranks among the best health insurance stocks to buy in 2025. The company offers its services in the United States and Canada. While the company primarily offers property and casualty insurance, it also offers health solutions for individuals, seniors, and businesses. The Allstate Corporation (NYSE:ALL) offers a wide range of plans, including dental, disability, cancer, critical illness, and accident insurance.
The company also offers Group Health coverage options to provide health benefits for businesses. However, on January 30, 2025, The Allstate Corporation (NYSE:ALL) announced its agreement to sell its Group Health business to Nationwide for $1.25 billion. This transaction combined with the previously announced sale of Employer Voluntary Benefits to StanCorp Financial Group will bring in total sale proceeds of $3.25 billion.
The Allstate Corporation (NYSE:ALL) is focused on maximizing shareholder value and achieving greater strategic alignment. The company’s individual health business reported an adjusted net income of $30 million in 2024. This business has attractive growth prospects and the company plans to either retain or combine it with another company.
5. CVS Health Corporation (NYSE:CVS)
Number of Hedge Fund Holders: 63
CVS Health Corporation (NYSE:CVS) is an American healthcare company that provides health insurance products and services through Aetna. The company also owns many other brands, including CVS Pharmacy, a retail pharmacy chain. Aetna offers a wide range of health plan options, including commercial coverage plans, Affordable Care Act (ACA) plans, Medicaid plans, Medicare plans, and vision and dental plans. It serves employer groups, individuals, and families. CVS Health Corporation (NYSE:CVS) ranks among the best health insurance stocks to buy in 2025 according to hedge funds.
The company is focused on expanding its healthcare offerings and driving innovation for Aetna’s self-insured customers. CVS Health Corporation (NYSE:CVS) recently introduced Simple Pay for its commercial customers. This differentiated offering provides greater price certainty before a visit or treatment. This makes quality healthcare simpler and more affordable for both members and employers. Additionally, in December 2024, CVS Health Corporation (NYSE:CVS) reported that Aetna is expanding the functionality of its health app to include Spanish language capabilities for all eligible health plan members. This will allow Aetna to better serve diverse populations.
The company finalized an enterprise-wide restructuring plan in the third quarter of 2024 to streamline and simplify the organization, enhance efficiency and lower costs. CVS Health Corporation (NYSE:CVS) is closing some of its retail pharmacy stores and optimizing its corporate workforce optimization. The company expects to close about 270 stores in 2025. CVS Health Corporation (NYSE:CVS) is also discontinuing certain non-core assets as it prioritizes long-term growth.
4. The Cigna Group (NYSE:CI)
Number of Hedge Fund Holders: 66
The Cigna Group (NYSE:CI) is an American multinational healthcare and insurance company. Through its businesses and its subsidiaries, the company offers a variety of insurance products, including health, dental, life, and disability insurance. It serves individuals, families, and employers. CI is one of the best health insurance stocks to buy in 2025.
The company is looking to enhance the overall patient experience by simplifying processes and improving support. The Cigna Group (NYSE:CI) is working to make prior authorizations faster and simpler to help reduce burdens for both patients and healthcare providers. The company is also looking to expand access to advocates for patients with complex health conditions to help them navigate their care journeys. These initiatives will require additional costs, but The Cigna Group (NYSE:CI) is committed to addressing patient needs and improving healthcare outcomes.
The company is focused on actively managing its capital and also improving shareholder value. In 2024, The Cigna Group (NYSE:CI) repurchased 20.9 million shares of common stock for approximately $7 billion and plans to continue repurchasing shares into 2025. The company plans to use the majority of the proceeds from the sale of its Medicare businesses, which are anticipated to close in the first quarter of 2025, to fund further share repurchases.
3. Elevance Health Inc. (NYSE:ELV)
Number of Hedge Fund Holders: 67
Elevance Health Inc. (NYSE:ELV), formerly known as Anthem, is one of the largest health insurance providers in the US. The company offers a range of services, including medical, pharmaceutical, dental, long-term care, disability, and behavioral health plans through brands like Anthem Blue Cross, Blue Shield, Wellpoint, and Carelon. Elevance Health Inc. (NYSE:ELV) ranks among the best health insurance stocks to buy in 2025.
The company is committed to enhancing its market presence, which is crucial for long-term growth. Elevance Health Inc. (NYSE:ELV) expanded its Affordable Care Act plans into Florida, Maryland, and Texas for the 2025 coverage year under the Wellpoint brand. Additionally, in its Medicare Advantage portfolio for 2025, the company’s plans are designed to be affordable and 90% of the plans have no monthly premium. Almost all plans offer $0 co-pays for primary care visits and provide access to additional benefits. In 2025, Elevance Health Inc. (NYSE:ELV) anticipates growth driven by increased adoption of its best-in-class products and services.
Vulcan Value Partners, an investment management company, shared insights about Elevance Health Inc. (NYSE:ELV) in its Q4 2024 investor letter. The letter noted that after a pause during the COVID-19 pandemic, states began to redetermine Medicaid eligibility in early 2023, which led to higher cancellations than expected. The remaining Medicaid population is older and sicker, which has resulted in higher-than-expected costs. This has caused Elevance Health Inc.’s (NYSE:ELV) medical loss ratio to rise, resulting in lower margins. The investment management firm noted that states set Medicaid reimbursement rates using data that lags by 12 to 18 months, which means that the higher costs are not yet reflected in these rates. Elevance Health Inc. (NYSE:ELV) expects that Medicaid reimbursement rates will be adjusted. Vulcan Value Partners also sees this as a short-term challenge and remains confident in the company’s long-term potential. The investment management company even added to its position in Elevance Health Inc. (NYSE:ELV) during the quarter.
2. The Progressive Corporation (NYSE:PGR)
Number of Hedge Fund Holders: 95
The Progressive Corporation (NYSE:PGR) is an American insurance company. While it is best known for its personal and commercial auto and home insurance products, the company also offers health insurance plans for individuals and families through Progressive Health by eHealth. It offers medical, dental, and vision insurance.
The company is focused on growing its customer base and expanding its market share. In the third quarter of 2024, The Progressive Corporation (NYSE:PGR) added nearly 1.6 million policies in force across its businesses. With this, the company had already added a total of nearly 4.2 million policies in 2024 by the end of the quarter. Additionally, the company increased its investments in advertising in Q3 2024.
The London Company, an investment management company, in its “The London Company Large Cap Strategy” third quarter 2024 investor letter highlighted the performance of The Progressive Corporation (NYSE:PGR) as it continued to gain market share from its competitors and improved its margins through effective management of underwriting risks and strategic pricing. The investment management firm believes that PGR will continue to perform well in all environments because of its competitive advantages and smart capital allocation.
1. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 112
UnitedHealth Group Incorporated (NYSE:UNH) is an American health insurance and healthcare services company. UNH operates under two primary brands: UnitedHealthcare, which provides health insurance, and Optum, which is focused on healthcare services. The company offers a full range of health benefits and serves various kinds of clients, including large employers, small businesses, and individuals. It also serves over 13 million Medicare recipients. UnitedHealth Group Incorporated (NYSE:UNH) is one of the best health insurance stocks to buy.
In November 2024, the company announced that it had expanded its Individual & Family Affordable Care Act (ACA) Marketplace plans coverage to 30 states. This expansion included new coverage areas in Indiana, Iowa, Nebraska, and Wyoming, as well as additional counties in 13 other states. With this increase in coverage area, UnitedHealth Group Incorporated (NYSE:UNH) was providing Individual & Family ACA Marketplace plans in over 1,250 counties across the US.
In addition to growing its business, the company is strategically focused on leveraging artificial intelligence (AI) to enhance its services. UnitedHealth Group Incorporated (NYSE:UNH) is using data and AI tools to help customers find the best value care options that suit them and their families. Additionally, the company is utilizing AI to streamline patient care and enhance overall operational effectiveness.
To stay ahead of the competition, UnitedHealth Group Incorporated (NYSE:UNH) is focused on a key strategy that revolves around value-based care. Wedgewood Partners, an investment management company, noted in its Q3 2024 investor letter that UnitedHealth Group Incorporated’s (NYSE:UNH) value-based care programs are focused more on preventative care and home-based visits for patients. This approach can lead to better health outcomes and also reduce costs for the US healthcare system. The investment management firm noted that UNH has invested in several core assets in order to support this value-based strategy. As the number of people in the US with health insurance coverage continues to reach new highs, this approach could become the standard of care according to Wedgewood Partners.
Overall, UNH ranks first among the 12 best health insurance stocks to buy in 2025. While we acknowledge the potential of health insurance companies, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UNH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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