Health Plans See Ups And Downs In Q3
Third-quarter results for the state’s health insurance companies are a mixed bag. While some companies made much more money than they did in Q3 of 2007, others saw their profits drop just as significantly.
Fallon Community Health Plan in Worcester saw the most significant upswing for the quarter, with net income of $5.7 million on revenue of $265 million. That’s up from $2.8 million net income on $227.5 million in revenue for the same quarter last year.
Still, for the first nine months of the year, the company had an operating loss of $900,000. In a statement, the company said that while its performance for the quarter is in line with its expectations it’s closely watching the economic climate, increasing unemployment levels and the progress of the state’s health care reform effort.
Bottom Line
Harvard Pilgrim Health Care, based in Wellesley, saw a more modest increase in profit, from $20.4 million in Q3 2007 to $23.8 million for this past quarter. Its revenues also rose slightly, from $631.9 million to $648.4 million.
In contrast, Tufts Health Plan, based in Watertown, reported net income of $17.3 million for the quarter, less than half of the $41 million it made for the third quarter of 2007. In a statement, it said the numbers met its expectations for the period and attributed the decline in profit to a more competitive environment.
Blue Cross Blue Shield of Massachusetts and its HMO Blue subsidiary also saw a drop in net income, from $110.4 million for Q3 2007 to $57.6 million for the same quarter this year. The company said it has efforts afoot to improve health care affordability, including encouraging greater use of evidence-based medicine, offering doctors and hospitals a new alternative quality contract option and reducing the health plan’s own administrative expenses.
Blue Cross Blue Shield remained the largest of the companies, but its membership numbers fell slightly, from 3.05 million in September 2007 to 3.01 million as of September 2008. The other three companies saw their enrollments rise. Tufts’ rose by nearly 44,000, to 698,039. Harvard Pilgrim gained more than 37,000 members, bringing it to a total of nearly 1.07 million. Fallon gained more than 24,000 members and reached a total of 216,074.
The current investment climate drove all four companies’ results down from where they might otherwise have been. While Fallon’s operating income rose from $700,000 million to $4.2 million, its investment income fell from $2.1 million to $1.5 million.
Harvard Pilgrim’s operating income rose from $12.9 million to $20.3 million, while its “investment and other income” dropped from $7.5 million to $3.5 million.
While Tufts’ operating income fell, from $24.3 million to $17.6 million, its investment income did far worse, dropping from $17.3 million to $2.5 million. Similarly, at Blue Cross, operating income fell from $94.5 million to $55.5 million, while investment income plummeted from $27.9 million to $3.7 million.
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