Top 10 Health Insurance Stocks to Buy

Published October 20, 2022 at 1:34 pm EDT Updated September 7, 2026 at 11:42 am EDT

In this article, we discuss the top 10 health insurance stocks to buy.

The health insurance industry has rapidly evolved over the past few years as insurer participation, pricing, and advanced plans drive innovation within the sector. According to a report by consulting firm McKinsey, 55 new insurers entered the market in 2022, representing a 21% increase over the past year, and marking the highest growth in participation in the industry since 2015, when participation had grown by around 26%. Over the past four years, product offerings have also increased, nearly tripling with half of that growth happening between 2021 and 2022.

Tech-enabled insurance plans have contributed most to these growth numbers, per data gathered by the consulting firm, led by firms like Oscar and Bright Health. Some of the other prominent names in the insurance sector that have growth catalysts include Humana Inc. (NYSE:HUM), Cigna Corporation (NYSE:CI), and MetLife, Inc. (NYSE:MET). Another interesting trend in the sector is the participation of exclusive provider organization plans. These have quadrupled to 36% as a share of all plan type offerings.

Total health expenditure is expected to continue on an upward trend across the globe for the next five years. This growth is closely correlated with industry revenues in the health insurance world. However, McKinsey has cautioned that macro uncertainty will persist in part because the enhanced premium subsidies created by the American Rescue Plan Act are due to expire at the end of 2022. If these subsidies are not renewed, pricing and consumer participation may face headwinds in the coming months.

Our Methodology

The companies that operate in the health insurance sector were selected for the list. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.

Iakov Filimonov/Shutterstock.com

Top Health Insurance Stocks to Buy

10. Manulife Financial Corporation (NYSE:MFC)

Number of Hedge Fund Holders: 15

Manulife Financial Corporation (NYSE:MFC) provides financial products and services internationally. It is one of the best insurance stocks to invest in. On October 12, Barclays analyst John Aiken maintained an Overweight rating on Manulife Financial stock lowered the price to C$29 from C$30, noting that the continued decline in equity valuations driven by lower asset levels within the wealth operations and seed losses will likely dampen earnings growth in the quarter.

At the end of the second quarter of 2022, 15 hedge funds in the database of Insider Monkey held stakes worth $155 million in Manulife Financial Corporation, compared to 19 in the preceding quarter worth $517.5 million.

Just like Humana Inc., Cigna Corporation, and MetLife, Inc., Manulife Financial Corporation is one of the best insurance stocks to buy according to hedge funds.

In its Q2 2022 investor letter, Harding Loenver, an asset management firm, highlighted a few stocks and Manulife Financial Corporation was one of them. Here is what the fund said:

“Manulife Financial Corporation, the Canadian life insurer operating primarily in North America and Asia, is a new holding. Manulife offers a full suite of life insurance products as well as retirement and wealth management services. While the wealth management and retirement products appeal to the aging populations of the Western world, long-term life insurance products address the needs of the growing number of middle-class families in places like China and southeast Asia. COVID-19-induced lockdowns in China brought the shares down to a significant discount to our estimate of long-term value. The holding now serves as a nice diversifier to our Asia-centered insurers AIA and Ping An.”

9. Clover Health Investments, Corp. (NASDAQ:CLOV)

Number of Hedge Fund Holders: 11

Clover Health Investments, Corp. (NASDAQ:CLOV) operates as a medicare advantage insurer in the United States. It is one of the top insurance stocks to invest in. On July 14, Clover Health Investments said that it will offer Medicare Advantage plans in 13 new counties across South Carolina, Tennessee, and Georgia. The company said that eligible people will be able to sign up for Clover’s plans during the Medicare Advantage Annual Enrolment Period from October 15 to December 7.

On August 9, Citi analyst Jason Cassorla maintained a Neutral rating on Clover Health Investments, Corp. stock and raised the price target to $3.50 from $3, highlighting the earnings beat of the firm in the second quarter.

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Two Sigma Advisors is a leading shareholder in Clover Health Investments, Corp., with 2.88 million shares worth more than $6.2 million.

8. American Equity Investment Life Holding Company (NYSE:AEL)

Number of Hedge Fund Holders: 14

American Equity Investment Life Holding Company (NYSE:AEL) provides insurance products in the United States. It is one of the major insurance stocks to invest in. On January 7, Brookfield Asset Management Reinsurance said it has purchased an additional 6,755,000 shares of common stock of American Equity Investment Life Holding Company, bringing its total combined equity interest in AEL to nearly 16%.

On October 7, Piper Sandler analyst John Barnidge maintained an Overweight rating on American Equity Investment Life Holding Company stock and raised the price target to $47 from $46.

At the end of the second quarter of 2022, 14 hedge funds in the database of Insider Monkey held stakes worth $103 million in American Equity Investment Life Holding Company, compared to 17 in the previous quarter worth $155.7 million.

In its Q2 2022 investor letter, First Pacific Adivsors, an asset management firm, highlighted a few stocks and American Equity Investment Life Holding Company was one of them. Here is what the fund said:

“American Equity Investment Life Holding Company (NYSE:AEL), a leading writer of fixed index annuities, has continued to transition to its American Equity Investment (AEL) 2.0 business model. The plan’s main goals are to diversify the company’s assets into a broader array of investments, including private debt through strategic partnerships, and to increase its use of reinsurance to free up capital. We think this is an interesting, but somewhat aggressive plan. Thus far, the results have been impressive, but we continue to monitor the credit quality of their assets as they move toward achieving their target of having 40% of their portfolio invested in private assets, up from 15.4%.”

7. Teladoc Health, Inc. (NYSE:TDOC)

Number of Hedge Fund Holders: 32

Teladoc Health, Inc. (NYSE:TDOC) provides virtual healthcare services in the United States and internationally. It is one of the elite insurance stocks to invest in. On September 26, Teladoc Health said it was providing free 24/7 general medical telehealth visits to Florida residents. Individuals in Florida who cannot access medical care because of Hurricane Ian can now seek treatment from a licensed healthcare professional for any non-emergency illness by calling Teladoc directly.

On October 11, Barclays analyst Steve Valiquette maintained an Equal Weight rating on Teladoc Health, Inc. stock and lowered the price target to $33 from $40, highlighting that the company’s Q3 earning outlook was positive.

At the end of the second quarter of 2022, 32 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Teladoc Health, Inc., compared to 36 the preceding quarter worth $1.97 billion.

In its Q1 2022 investor letter, RiverPark Funds, an asset management firm, highlighted a few stocks and Teladoc Health, Inc. was one of them. Here is what the fund said:

“Teladoc Health, Inc. is the largest telehealth provider in the US and has recently begun to expand internationally. TDOC’s platform enables an ever-expanding list of patient-doctor interactions (including those for primary health care, mental health issues and chronic condition management) to transition from an on-site visit to one that can be done remotely with full video- based interaction. TDOC provides its platform of services on both a business-to-business and direct-to-consumer basis, through monthly subscription-based relationships. For its core business-to-business clients, the company contracts with a wide range of entities, including large scale employers (the company currently contracts with over 50% of the Fortune 500), health plans, health systems, and medical insurance companies, which currently cover more than 50 million members. For these customers, the company provides a win-win-win, as patients spend no time traveling and less time waiting, doctors are more efficient seeing more patients in less time, and payers (employers and plan sponsors) save money while being able to offer a highly popular additional benefit for their employees. This B to B market is projected to be a +$100 billion market opportunity and TDOC is the clear global market leader. For its direct-to- consumer clients, the company provides a growing suite of services for individuals to have affordable access to on-demand and scheduled medical services, for which their current insurance does not provide reimbursement (such as extended mental health counseling) (…read more)

6. Molina Healthcare, Inc. (NYSE:MOH)

Number of Hedge Fund Holders: 34

Molina Healthcare, Inc. (NYSE:MOH) provides managed health care services to low-income families and individuals under the Medicaid and Medicare programs and through the state insurance marketplaces. It is one of the prominent insurance stocks to invest in. On September 26, Molina Healthcare, UnitedHealth Group, and Centene Corporation were selected by the Department of Health and Human Services in Nebraska to administer the state’s Medicaid program known as Heritage Health. This is a five year contract which also includes options for two one-year renewals.

On October 3, JPMorgan analyst Calvin Sternick initiated coverage of Molina Healthcare, Inc. stock with an Overweight rating and a $360 price target, noting that the company’s focus on lower income demographics and cost management would sustain its industry-leading margin profile.

At the end of the second quarter of 2022, 34 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Molina Healthcare, Inc., compared to 36 in the preceding quarter worth $1.7 billion.

In addition to Humana Inc., Cigna Corporation, and MetLife, Inc., Molina Healthcare, Inc. is one of the best insurance stocks to buy according to hedge funds.

5. Centene Corporation (NYSE:CNC)

Number of Hedge Fund Holders: 58

Centene Corporation (NYSE:CNC) operates as a multi-national healthcare enterprise that provides programs and services to under-insured and uninsured individuals in the United States. It is one of the best insurance stocks to invest in. On September 19, Texas Attorney General Ken Paxton announced a $165.6 million settlement with Centene and its units over alleged Medical Fraud. On July 25, Centene said that it will sell its European and Spanish Healthcare businesses as the company continues to review strategic alternatives for its international portfolio.

On October 3, Barclays analyst Steve Valiquette maintained an Overweight rating on Centene Corporation stock and lowered the price target to $100 from $107, highlighting that the company expected a better medical cost in Q3.

Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Viking Global is a leading shareholder in Centene Corporation, with $8.3 million shares worth more than $701.7 million.

4. CVS Health Corporation (NYSE:CVS)

Number of Hedge Fund Holders: 65

CVS Health Corporation (NYSE:CVS) provides health services in the United States. It is one of the top insurance stocks to invest in. On September 8, Aetna, a unit of CVS Health, said that it will enter an individual exchange marketplace in New Jersey with its co-branded insurance product on January 1, 2023. It will give members access to hospitals, specialists, primary care doctors, and mental health providers.

On September 7, Evercore ISI analyst Elizabeth Anderson maintained an Outperform rating on CVS Health Corporation stock and raised the price target to $125 from $120, noting that the updated ratings model included accretion estimates from the Signify Health acquisition on a pro forma basis.

In its Q3 2022 investor letter, Vltava Fund, an asset management firm, highlighted a few stocks and CVS Health Corporation was one of them. Here is what the fund said:

“CVS Health Corporation is a leader in the provision of healthcare services in the USA. It has three main businesses: an enormous network of pharmacies, a health insurance company, and “prescription benefit management”, which is a kind of intermediary between insurance companies and pharmacies. This is the result of large acquisitions over the past 15 years – most notably of Caremark (2007) and Aetna (2018). The markets had deemed its acquisition of health insurer Aetna too expensive (and we agree), so CVS stock then fell into disfavour for a few years.

We took advantage of this in the summer of 2020 and brought the stock into our portfolio at a time when its price was pressed down still further by the coronavirus pandemic. CVS is a giant. It has revenues of USD 300 billion, making it one of the largest companies in the world. It is a relatively stable and highly profitable company with strong free cash flow. Over the past few years, CVS has focused primarily on reducing debt.

This is already much lower than it had been after the Aetna acquisition, and most of the cash is now likely to go to shareholders through share buybacks or be used for smaller acquisitions to grow the company further. CVS trades at about 11 times annual earnings, which is a very appealing valuation given the expected future growth in profitability and overall modest cyclicality in its business.”

3. Cigna Corporation (NYSE:CI)

Number of Hedge Fund Holders: 66

Cigna Corporation provides insurance and related products and services in the United States. It is one of the elite insurance stocks to invest in. On September 28, Cigna Corp said that it has launched a suite of products, including Cigna Pathwell, to connect customers with quality care providers and lower costs for customers. Pathwell uses clinical expertise, digital solutions, treatment planning, and analytics to integrate with the company’s medical benefits management to create a personalized care experience for patients.

On August 8, investment advisory UBS maintained a Buy rating on Cigna Corporation stock and raised the price target on Cigna to $330 from $310. Analyst Kevin Caliendo issued the ratings update.

At the end of the second quarter of 2022, 66 hedge funds in the database of Insider Monkey held stakes worth $3.2 billion in Cigna Corporation, compared to 63 in the preceding quarter worth $2.7 billion.

In its Q2 2022 investor letter, Aristotle Capital Management, LLC , an asset management firm, highlighted a few stocks and Cigna Corporation was one of them. Here is what the fund said:

“Cigna Corporation contributed to performance in the second quarter, outpacing the benchmark Health Care sector return. We believe Cigna benefited from investors seeking relative “safety” in the managed care sector and the stock’s attractive valuation at just over 10 times next year’s earnings. During the quarter, Cigna reported an earnings beat due to a better-than-expected medical loss ratio.”

2. Humana Inc. (NYSE:HUM)

Number of Hedge Fund Holders: 69

Humana Inc. operates as a health and well-being company in the United States. It is one of the major insurance stocks to invest in. On October 12, Humana and USAA, a health insurer, co-branded Rx Plan, a medicare advantage plan which will provide flexibility to users to see in network local doctors and fill prescriptions at pharmacies close to their homes. It is the only Medicare advantage plan developed in partnership with USAA.

On September 20, RBC Capital analyst Frank Morgan maintained an Outperform rating on Humana Inc. stock and raised the price target to $544 from $541, noting that the company’s strong long-term earnings targets had led to growth in core Medicare Advantage and value-based care initiatives.

In its Q3 2022 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and Humana Inc. was one of them. Here is what the fund said:

“A top contributor to performance for the one-year period was Humana Inc. (U.S.), a leader and near pure play in the fastest growing sector of managed care, Medicare Advantage. In its first-quarter earnings report, the company generally beat consensus estimates and raised guidance. Encouragingly, the issues that had caused this year’s Medicare Advantage enrollment shortfall seem to have stabilized, and during the most recent open enrolment period, member retention appears in line or even slightly better than expectations. In addition, Humana reaffirmed its full-year guidance for $24.50 adjusted earnings per common share. The company’s second-quarter earnings results also beat consensus expectations due to lower than expected medical expenses, which stemmed from a decline in Covid-19-related medical costs that was not fully offset by all other medical costs returning to normal levels. Management also indicated that the company is tracking well against achieving its $1 billion cost-savings plan by the end of 2023, and it intends to reinvest the majority of those savings into improved member benefits. Ultimately, Humana’s share price reached our sell target, and we opted to eliminate the position.”

1. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 91

United Group Incorporated (NYSE:UNH) operates as a diversified health care company in the United States. It is one of the major insurance stocks to invest in. On October 12, the United Health Foundation, a humanitarian foundation of UnitedHealth Group, announced a 3 year partnership with Active Minds, a non-profit mental health organization. On October 3, UnitedHealth donated $1 million to support residents of Florida which were affected by Hurricane Ian.

On October 17, RBC Capital analyst Ben Hendrix maintained an Outperform rating on UnitedHealth Group Incorporated stock and raised the price target to $592 from $588, noting that the company reported strong Q3 results.

At the end of the second quarter of 2022, 91 hedge funds in the database of Insider Monkey held stakes worth $10.9 billion in United Group Incorporated, compared to 103 in the preceding quarter worth $12.8 billion.

In its Q2 2022 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and United Group Incorporated was one of them. Here is what the fund said:

“UnitedHealth Group Incorporated reported solid quarterly results and raised 2022 guidance modestly. Additionally, managed care is another industry that is viewed as defensive in the current environment, which helped support UnitedHealth and its peer group.”

You can also take a peek at 10 Best MLP Dividend Stocks to Buy and 10 Best Stocks to Buy According to Billionaire Dan Loeb.

Follow Insider Monkey on Twitter