The state's eight non-profit health plans that cover most Minnesotans turned a profit last year.
In 2009, a year when many small employers dropped coverage and membership overall was flat, the health plans that cover most Minnesotans managed to turn in decent financials.
Net income for the state's eight nonprofit plans, including Blue Cross and Blue Shield, HealthPartners and Medica, more than quadrupled to $220.4 million. Investments bounced back after a difficult 2008, and the plans also turned an operating profit after four years of operating in the red or close to it.
Enrollment was flat at 4.3 million.
"Enrollment is pretty stable, but we're seeing people shift around," said Julie Brunner, executive director of the Minnesota Council of Health Plans, which released its annual report on health plans' financial performance Monday.
Not surprisingly considering the bad economy, enrollment in government programs, including Medical Assistance, General Assistance Medical Care and MinnesotaCare, jumped 14 percent, to 462,013 people. At the same time, private insurance coverage suffered, and some companies with 50 or fewer employees stopped offering coverage. Small-group coverage fell 10 percent to 380,171 in 2009.
Many more people turned to plans linked to a health savings account. Enrollment in such HSA-linked plans, which feature lower premiums and higher deductibles, grew 32 percent to 721,328, or one in six enrollees.
A 'very healthy' spread
Average premium increases for the plans in 2009 were between 5 and 8 percent, the same as the previous year.
Premium revenue was up 10 percent to $18.6 billion. Investments brought in $74.8 million, up from just $11 million in 2008.
Medical costs were up 8 percent to $17 billion, or $3,983 per member. Administrative costs and taxes were flat and made up 8.7 percent of premium revenue.
"They did better on every line of business," said Allan Baumgarten, an independent health consultant, adding that the health plans did particularly well on public programs. "There's always been a healthy spread between what the state pays the health plans and what the health plans spend on medical care for these enrollees. It looks like the spread got very healthy this year."
While the council of health plans doesn't break out numbers for individual insurers, Blue Cross and Blue Shield and HealthPartners issued separate statements Monday.
Blue Cross, the state's biggest insurer, said membership was flat at 2.8 million members. Net income was $132 million on revenue of $9.1 billion.
"Over the last year, the challenging business climate had a direct impact on enrollment, with significant layoffs among our member and client base," Chief Executive Patrick Geraghty said in a statement. "In order to ensure our own administrative expenses were in line with membership trends, we undertook some difficult steps, including making staff reductions and freezing merit pay increases."
Bloomington-based HealthPartners said it added 50,000 medical and dental members in 2009 to total 1.3 million. It also said that unlike the industry as a whole, HealthPartners' small-group market has grown for the past three years to more than 100,000 members.
Looking ahead, the expansion of coverage brought about by the new health reform law could bode well for health plans.
"The Medicaid side will do very well," Baumgarten said. "There'll be lots of new enrollees and they'll get better payments because the federal government wants to make sure providers will take them."
Chen May Yee • 612-673-7434