Net income soared last year for Blue Cross and Blue Shield of Minnesota as the Eagan-based health insurer saw a turnaround in its business managing care for beneficiaries in the state’s Medical Assistance and MinnesotaCare programs.

Minnesota’s public health insurance programs weren’t the only factor. The Blue Cross financial results also included income in the individual market offset to a degree by expenses related to a big shift in Medicare coverage.

While health insurance was more profitable last year, Blue Cross’s parent company, which is called Stella, posted an overall loss of $93 million due in large part to slumping investment returns.

“We experienced meaningful improvement in operating performance in 2018, as we stabilized our Medicaid business and completed our operating model transformation,” Craig Samitt, president and chief executive of Stella as well as Blue Cross, said in a statement.

In terms of revenue, Blue Cross is the largest of seven nonprofit insurers that collectively have controlled a large share of the state’s health plan market. The carrier employs about 3,800 people.

The improvement at Blue Cross in overall financial performance, as well as income from the public programs business, mirrors the general trend last year for nonprofit health plans in the state. The Minnesota Council of Health Plans, which is a trade group, said the seven nonprofit insurers collectively posted about $590 million in net income for 2018.

Blue Cross and its affiliated HMO, which is called Blue Plus, posted $177.6 million in net income last year on $6.4 billion in revenue, according to a Star Tribune review of regulatory filings this month. In 2017, the health insurance business posted $20.2 million in net income, which includes earnings from health insurance operations as well as investments.

Medical Assistance, which is the state’s name for the state-federal Medicaid program, provides coverage for many groups including people living in poverty. MinnesotaCare provides coverage for a slightly higher income group with jobs that don’t provide health benefits.

For 2016, the state saw significant savings by putting out for a statewide competitive bid its primary managed-care contract for what’s called Prepaid Medical Assistance (PMAP) and MinnesotaCare. Carriers, conversely, struggled to cover their costs, with Minnetonka-based Medica dropping out in the middle of the contract.

The state for 2018 increased its payment rates to the health plans, but also imposed a cap on profits.

“After two years of consecutive operating losses totaling over $205 million in the administration of these programs, Blue Plus reported operating earnings of $47 million for PMAP and MinnesotaCare in 2018,” Blue Cross said in a statement.

For a second consecutive year, Blue Cross expects to pay rebates in the market where individuals buy health insurance. Those health plans generated $55 million in operating earnings last year, Blue Cross said, adding that “two years of positive operating performance follows a three-year span of losses in excess of a half a billion dollars.”

The individual market underwent big changes in 2014 due to the federal Affordable Care Act, which prohibited health insurers from denying coverage to people with pre-existing health conditions. Blue Cross and other carriers saw financial losses through 2016, but have seen the market stabilize due in part to a state-funded “reinsurance” program that cover some medical costs in the market.

A final factor in the 2018 results was the Blue Cross business selling health plans and supplemental insurance to Medicare beneficiaries. The state’s Medicare market underwent a large disruption at the end of 2018 as a type of insurance known as “Medicare Cost” health plans were eliminated across much of the state; Blue Cross had the largest Cost plan in Minnesota, and saw many switch to its “Medicare Advantage” plan as a result.

In a regulatory filing, Blue Cross noted expenses “due to capability investments related to transitioning from Medicare Cost to Medicare Advantage.”

Stella, the Blue Cross parent company, also operates an asset-management company and a third-party administrator of medical spending accounts that are paired with high-deductible health plans. Overall, the company posted for 2018 a loss of $93 million on $6.8 billion in revenue. In 2017, the parent company saw net income of $50 million, due in part to one-time tax benefit.