- Language: English
- 600 Pages
- Published: June 2013
- Region: World
Minnesota Health Market Review 2012
- Published: September 2012
- Region: United States
- Allan Baumgarten
Minnesota Health Market Review 2012 finds: Minnesota HMOs Post Excellent Profits on Employer Plans and Public Programs
Even though four HMOs returned $103 million in excess profits to the Medicaid program, they still enjoyed strong profits on public programs and employer group plans.
These results and other market trends are analyzed in Part One of Minnesota Health Market Review 2012. The report, released here this week, is Allan Baumgarten?s 23rd annual report analyzing the Minnesota health care market. He is an Minnesota-based analyst and consultant who has published or co-authored reports analyzing health care markets in Minnesota and 11 other states: Arizona, California, Colorado, Florida, Illinois, Kentucky, Michigan, New York, Ohio, Texas and Wisconsin. Part Two of the Minnesota report, to be released later this year, will include an analysis of profitability and care utilization for hospitals in the state and updated information on HMOs.
Among the findings in the new report:
- Minnesota HMOs reported a third consecutive year of strong profits in 2011. Minnesota HMOs reported net income of $230.4 million in 2011, including $158 million in operating income and $72.4 million in investment revenue. Their actual net income was even higher: because of concerns over HMO profits on Medicaid in 2010, four HMOs agreed to cap their underwriting income on Medicaid and MinnesotaCare at 1% of their premiums for 2011. Those HMOs returned to the Medicaid program $103 million in profits that exceeded the cap.
- The report provides a detailed analysis of financial metrics for the HMOs on their state public programs, showing their results as reported and before the return of the excess surplus. By adding back the returned dollars and some other expenses, the report shows that Minnesota HMOs had net income on Medicaid (including investment income) of $165.8 million, or 8.5% of premiums. The HMOs also reported $60 million in underwriting income for Minnesota Senior Health Options, a relatively small program serving persons who are receiving both Medicaid and Medicare benefits. Those gains were partly offset by losses on two other state programs.
Led by HealthPartners, HMOs had strong profits on employer group plans. While premiums increased, average medical expenses went down, so the spread between group premiums and medical expenses, per member per month, increased from $48 in 2010 to $66 in 2011. HealthPartners boosted its underwriting income for groups to $72.8 million.
Enrollment in HMOs and county plans fell by 5.1% in 2011. Enrollment in employer group plans continues to decrease and has now fallen below 225,000. That was only partly offset by 30,000 new enrollees in Medicaid and other public plans. However, the prospects for profitable enrollment growth for HMOs serving Medicaid, Medicare and commercial enrollees are very good and enhanced by initiatives under the Affordable Care Act.
HMOs maintain capital that is a billion dollars more than the required minimum. Minnesota HMOs added almost $200 million to their capital in 2011, bringing the total to $1.743 billion. At the end the year, they were required to have capital of $773 million. On average, HMOs have enough capital that they could continue to pay claims and overhead for more than three months even if no revenues were coming in. That is up from 2.4 months in 2009. SHOW LESS READ MORE >
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