August 15, 2011
Assurant Inc. (New York) reported that after-tax operating income at its health insurance segment declined 79% to $5.2 million, a shortfall the company attributes partly to healthcare reform. Specifically, the company says it reduced second quarter after-tax operating income at its health segment by $10.9 million to reflect accruals for premium rebates associated with minimum medical cost ratio requirements. The rebate accrual was partially offset lower operating expenses, reduced agent commissions, and lower sales of new policies driven by the commission cuts, the company says.
Said another way: healthcare reform is bad for health plan profits. But you knew that already.
August 12, 2011
This is the kind of selective reporting that drives me crazy. Sally Pipes of the Pacific Research Institute trashes ObamaCare in an opinion piece in Forbes — implying that recent government projections show healthcare costs will increase dramatically because of reform. Here’s what the government analysis actually says:
Average annual growth in national health spending is expected to be 0.1 percentage point higher (5.8 percent) under current law compared to projected average growth prior to the passage of the Affordable Care Act (5.7 percent) for 2010 through 2020. Simultaneously, by 2020, nearly thirty million Americans are expected to gain health insurance coverage as a result of the Affordable Care Act.
August 10, 2011
Net income at 204 HMOs in 12 states fell 15% to $7.6 billion on revenues of $214 billion in 2010, up 3%, according to a tally of state department of insurance data by Health Plan Market Trends Letter. Net margin at the 12 plans was 3.6%.
However, a big decline in Ohio accounted for the vast majority of the shortfall. The Ohio shortfall can largely be attributed to WellPoint’s Community Insurance Co., which reported a $2.3 billion net capital gain in 2009, compared to just $15 million in 2010, skewing comparisons.
Excluding Ohio, net income at the remaining 11 plans rose 12% to $6.9 billion on revenues of $202.3 billion, a 3.4% margin. A big turnaround in Massachusetts accounted for much of the change, driven by substantial improvement in the financials of Blue Cross Blue Shield of Massachusetts.
Fully funded HMO membership for the 12 states declined nearly 2% to 39.2 million — continuing a trend of eroding enrollment.
August 9, 2011
It’s another strong quarter for publicly traded managed care companies, and the main reason is a familiar one – lower than expected medical costs. While not all the numbers are in yet, our tally of results at 12 companies shows second-quarter 2011 net income rose 28%. Through six months, net income at the same 12 companies was up 26%. Net margin in the second quarter was 5.2%. A discussion of company-specific results appears in the Aug. 1 issue of Health Plan Market Trends.