Case Study Company: HorizonCare Health Plan

HorizonCare is a midsize, multi-state insurer that participates in all four major U.S. risk-bearing markets: Medicare Advantage, Medicaid Managed Care, the ACA Individual (nongroup) market, and Fully-Insured Employer Group coverage. Its 2023 business decisions, recounted below, illustrate how insurer finance ripples through household budgets and public-policy goals.

Financial Performance Snapshot

KFF’s cross-industry analysis of statutory filings offers a benchmark that HorizonCare’s CFO, Maya Patel, uses to judge each of her product lines. Table 1 juxtaposes company results with national medians drawn from that dataset.

Table 1. 2024 Gross Margins and Medical Loss Ratios (MLRs) per Enrollee

National data source: KFF analysis of insurer statutory filings through 2024 .

In Patel’s words, “Our biggest profit center echoes the national trend that Medicare Advantage plans recorded the highest gross margins per enrollee at $1,982 in 2023 , while Medicaid continues to run thin.” She also notes that gross margin is not net income; administrative overhead, taxes, and quality-bonus investments must still be deducted.

How Margins Meet Member Experience

On the ground, families do not speak in the language of margins—they speak in premiums, deductibles, and surprise bills. HorizonCare’s member-services dashboard shows that 61 percent of inbound calls involve drug costs, mirroring KFF’s finding that one-third of adults took cost-saving measures such as skipping doses or cutting pills in half . When finance teams push too aggressively for lower MLRs, the pressure often surfaces in these day-to-day affordability pain points.

Designing Products Around Risk Pools

Patel’s actuarial group segments HorizonCare’s book of business into three archetypal risk pools described by PersonalFinanceLab: public, employer, and individual coverage. As that resource notes, employer-sponsored group insurance covers roughly 60 percent of Americans and benefits from lower premiums because of a larger pool . In 2023 HorizonCare channeled surplus from its employer line to subsidize marketing and care-management programs in the higher-risk individual exchange.

Medicaid Redeterminations: A Stress Test

The year’s sharpest operational jolt arrived when pandemic-era continuous enrollment ended and 9 million beneficiaries cycled off Medicaid nationwide. HorizonCare’s margin in that segment dipped to $710 per enrollee—still above break-even but below the national median—because gross margins were the lowest in Medicaid Managed Care, at $753, while MLRs crept up to 87 percent .

Strategic Response Aligned With UHC Principles

Guided by WHO’s insistence that reforms must “shift toward public funding sources and reduce fragmentation,” Patel launched a three-pronged plan:

• Revenue Raising: Lobby state partners for actuarially sound capitation rates that recognize post-pandemic acuity spikes.
  • Pooling: Merge small-group and on-exchange risk pools to widen the base for expensive specialty drugs.
  • Purchasing: Expand value-based contracts so that payments depend on hospital readmission rates.

Financing Meets Population Health

Coverage is a means, not an end. States that expanded Medicaid saw sharply higher access to preventive and chronic-care services, along with lower uncompensated hospital bills . Patel argues that strong, predictable insurer margins create room for exactly those evidence-based benefits—such as zero-copay insulin and home blood-pressure kits—that bend both the cost and morbidity curves.

Lessons Learned

• A one-point rise in MLR inside Medicare Advantage can erase nearly $20 million in annual surplus for a regional carrier the size of HorizonCare.
  • Consumer affordability anxieties are tightly correlated with margin-management choices; squeezing provider fees alone is insufficient when 62 percent of adults rank the cost of health services as their top financial worry.
  • Aligning product strategy with WHO’s financing functions—especially strategic purchasing—offers a bridge between solvency and social mission.

Conclusion

Health-insurance finance lives at the nexus of actuarial math, household budgets, and public health. HorizonCare’s 2023 story shows that disciplined margin management can coexist with broader coverage goals, but only when insurers embed the core principles of revenue-raising, pooling, and purchasing within their operational DNA . In the long run, the sustainability of U.S. health care will depend less on any single payer or product line than on our collective ability to knit those principles into a coherent, affordable safety net for all.