Investment income mitigated health plan losses to a degree last year, a new report shows, but couldn't compensate for all the red ink insurers saw from the business of selling coverage.

Minnesota's nonprofit HMOs and health insurers collectively earned about $149 million from investments in 2016, Allan Baumgarten, an independent health care analyst in St. Louis Park, said in a report being released Friday.

The gains couldn't offset collective losses, however, on state public health insurance programs and the troubled market where individuals buy coverage.

After factoring investment gains and operating losses, HMOs and health insurance companies posted a combined net loss of about $512 million for the year, according to Baumgarten's annual report on the finances of Minnesota health plans.

"I think it's largely a one-year blip," he said, noting that two insurers with big losses last year have taken steps to reduce the red ink.

Jim Schowalter, chief executive of the Minnesota Council of Health Plans, a trade group for insurers, said the losses might endure because broader problems haven't necessarily been fixed in either of the markets where carriers saw losses last year. In April, the trade group said operating losses for health plans made 2016 the worst financial year in a decade for the industry.

"Nothing about the losses in 2016 was one-time," Schowalter said in a statement.

Minnesota is one of many states that has seen troubles in the individual market, which serves self-employed people and those who don't get coverage from an employer or the government. The federal Affordable Care Act has brought sweeping changes to the individual market, with health plans struggling to make the business profitable as a result.

On Thursday, the Wall Street Journal reported that a health insurer in Washington announced a pullback from the state's individual market that apparently will leave two counties with no health insurance options for 2018. It also looks like portions of Missouri and Ohio won't have individual market offerings, the newspaper reported, following recently announced exits by health insurers.

In the public program market, some Minnesota health plans say rates set through competitive bids have turned out to be too low in government-run insurance programs for people with low incomes.

Baumgarten's report tabulates revenue and net income for eight HMOs, including four that also have licenses to do business as insurance companies.

In addition, Baumgarten reports financial results for three county-based purchasing organizations that are hired, along with HMOs, to manage care for people in state public health insurance programs.

Collectively, the 11 organizations had a net loss in 2016 of about $523 million on $16.1 billion in revenue, according to Baumgarten's report, which tabulated a smaller net loss of about $10 million for the group in 2015.

Despite losses the last two years, Baumgarten reported the 11 organizations over the last five years have a cumulative net income of $393 million.

Whereas investment income during 2015 and 2016 helped mitigate operating losses for health plans, the sums were "frosting on the cake," Baumgarten said, during earlier years when insurers made money on their operations.

For 2017, Eagan-based Blue Cross and Blue Shield of Minnesota stopped selling certain health plans in the individual market that were a large source of losses for the company. In the public program market, Minnetonka-based Medica in May dropped a large contract that it blamed for losses.

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck