Top 5 healthcare payors

*Updated March 2022 

As of 2020, the average deductible for a middle-income household accounted for 4.7% of the total income. This is up from 3.3% in 2010. Higher deductibles could result in denial of care from providers, reluctance to seek care from patients and an increase in charity care spending—all of which would negatively affect a healthcare payor's bottom line.  

The good news is that payors can reduce spending waste and effectively manage costs in an uncertain market using all-payor claims databases and blockchain.  

We compiled this list to determine which payors receive the highest total direct premiums.  

Top 5 healthcare payors by total direct premium earned 

Fig 1. Data from Definitive Healthcare's Payor Database. Data accessed March 2022. 

What is a healthcare payor? 

The term "payor" refers to Preferred Provider Organizations (PPOs), Health Maintenance Organizations (HMOs), healthcare service contractors, state insurance agencies, claim handlers and more. The primary difference between a health plan and a payor is that a health plan pays the cost of medical care, and a payor is an entity responsible for processing patient eligibility, services, claims, enrollment, or payment. 

Payor vs payer  

There is some conflict regarding the use of "payer" versus "payor." Though people often use both spellings interchangeably, "payor" is preferred by the American Medical Association (AMA). 

We also looked at which payors covered the most lives. See below.  

Top 5 healthcare payors by covered lives 

Fig 2. Data from Definitive Healthcare's Payor Database. Data accessed March 2022. 

What was the top payor by premiums earned and covered lives? 

Kaiser Permanente Health Plans was the top payor by premiums earned ($55,596,803,838) and covered lives (9,257,115 lives). Along with Kaiser Permanente, Anthem Blue Cross & Blue Shield, United Healthcare and Health Care Service Corporation Group were in the top five for both premiums earned and covered lives. In total, the top five payors earned $181,736,654,360 in premiums and covered 29,961,784 lives. 

How can healthcare payors cut overspending  

All-payor claims databases 

All-Payor Claims Databases (APCDs) are electronic systems that collect healthcare claims data from payors. As of 2020, 21 states had an APCD, and 11 states were interested in implementing one. To develop an APCD system, state governments must assess the local healthcare market. This includes evaluating the health insurance market and public payors, developing data submission guidelines and managing patient health data. 

Though it seems like an immense amount of work and can be costly to maintain, the payoff is significant in population health monitoring and healthcare spending reduction. Because APCDs are statewide systems, they simplify data sharing between payors, providers and regulators. This allows for easy analysis of medical claims and identification of areas to prevent financial waste.  

Wasteful spending costs employers up to $2 billion per year or about one-fifth of the total spend, according to a 2017 report from the American Health Policy Institute (AHPI). 

APCDs can also educate payors and other stakeholders on areas overutilizing healthcare services or where preventive care could have positively impacted overall spending. Once payors have this data, they can work with providers to deliver more comprehensive care, thus improving care outcomes and reducing costs. For example, an NIH study reviewing APCD data in Virginia found that unnecessary low-cost healthcare services, like lab tests and EKGs, cost more than $586 million annually.  

Blockchain 

A 2020 CMS report shows out-of-pocket spending accounted for 9% of total national health expenditure. This means patients will have higher expectations for care outcomes, provider communication and data security. Like current EHR systems, blockchain eases communication between providers and payors, making data easily accessible to those who have permission to view it. 

Blockchain is an expandable list of electronic records that are connected and secured using encrypting technology. The adoption of blockchain in healthcare has been slow to start but has vast potential as electronic health records (EHR) and electronic medical records (EMR) become virtually omnipresent.  

Since EHR systems and healthcare facilities can be vulnerable to cybersecurity breaches, implementing blockchain could save the healthcare industry as much as $100 billion per year by eliminating fraud. 

Like APCDs, blockchain compiles massive amounts of patient data, allowing easier analysis. This could allow employers who offer health plans to see the categories of care costing the most money and implement wellness initiatives to combat them. Blockchain could offer a window into why patients seek care, whether smoking cessation, weight loss or other areas. 

Learn More 

By combining billions of private medical and Rx claims with CMS and proprietary data, Definitive Healthcare empowers its users to better analyze healthcare market trends, develop comprehensive segmentation strategies, identify industry leaders and hone sales and marketing strategies. 

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