Health Plans Report Mixed Results Through September 30, 2014
By David Peel
Publisher and Editor
Washington Healthcare News
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Original Publish Date: December 1, 2014
Fifteen of the largest domestic health plans in Washington State recently filed financial reports for the nine months ended September 30, 2014 with only three reporting higher net income than the same period in 2013 and nine reporting a net loss.
We asked plan representatives to comment on their plan’s financial results and heard a common theme. ACA related administrative taxes and fees were affecting bottom lines.
Rachelle Cunningham, Plan Representative of Regence BlueShield, said, “Operating expense increased markedly year over year with the new ACA insurer assessments, reducing net income to net loss.”
Plan Representative Melanie Coon of Premera said, “The ACA imposed several taxes and administrative fees on the Company which have reduced our operating margins and were not applicable in the prior year.”
These figures represent the first nine months of financial results associated with full implementation of the Affordable Care Act.
Our report shown here highlights financial results and shows member months (the combined total of month ending membership for each nine month period), total revenues, net underwriting gain (loss), investment gain (loss), net income (loss) and statutory capital.
The second page of our report presents key financial statistics. When the financial figures on the first page are divided by member months, a monthly average is obtained that is helpful when comparing one plan to another. These “per member per month” averages are presented in the middle section of the second page.
Finally, we present statutory capital per average member in the right hand section of the second page. This is essentially the amount of “cushion” on a per member basis a company has available to cover inadequate cost estimates. Alternatively, this is the liquidating value of the company per average insured person.
These figures represent the first nine months of financial results associated with full implementation of the Affordable Care Act.
As you review the numbers, keep in mind there are differences in the type of membership each plan serves.
All information in this report was obtained through publicly available reports filed with the Washington State Office of Insurance Commissioner (OIC). Information not required to be filed with the OIC (self-insured and some insured business from smaller, non-domestic carriers) is not included in this report nor is it referenced in this article.
These financial results may not be adequately reflected in the January 2015 rate increases because of rate filing deadlines but will be passed on to customers at some point.
Our next financial report will cover calender year 2014 compared to calendar year 2013.
David Peel can be reached at dpeel@healthcarenewssite.com.