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Minnesota Health Market Review 2021 Part 1

  • ID: 5351797
  • Report
  • June 2021
  • Region: United States
  • Allan Baumgarten
The COVID-19 Pandemic Drives Higher Profits For Health Plans

FEATURED COMPANIES

  • Blue Cross Blue Shield
  • Humana
  • Medica Insurance Company
  • UCare
  • MORE

Minnesota health plans increased their enrollment and more than lower claims for surgeries and other primary and acute care. Six health plans enjoyed an unexpected windfall when they received payments of more than $380 million under the Affordable Care Act Risk Corridor program.

This is the 32nd edition of the report, which analyzes key trends and competitive strategies for payer and provider organizations in Minnesota’s health care markets.

The report finds that:

  • Minnesota HMOs and County-Based Purchasing plans improved their net income from a net loss of $70.4 million in 2019 to a positive net income of $272.3 million in 2020. Medica Health Plans was the most profitable HMO, with a net income of $77.5 million and a margin of 6.8%, while Medica Insurance Company had a net income of $257.3 million, based on its operations in nine states.
  • Medicaid and public programs were once again the most profitable line of business here. HMOs and County-Based Purchasing plans reported underwriting income (before investment revenues and income taxes) of $178.4 million on their state public programs in 2020. That was up from an underwriting loss of $129 million in 2019. The seven plans participating in the Minnesota Senior Health Options program (for persons receiving both Medicaid and Medicare) had underwriting income of $115 million from the program in 2020, up from $82.3 million in 2019.
  • Blue Cross Blue Shield received $249.7 million from the ACA risk corridor to compensate for losses on its individual plans between 2014 and 2016. Five other Minnesota companies split about $130 million into risk corridor payments, although two, Blue Cross Blue Shield and UCare, gave up part of their payment in exchange for an advance payment from investment funds.
  • Enrollment in HMOs and County-Based Purchasing plans increased by 11.6% in 2020, with Medicaid and other public programs adding nearly 170,000 net new members. UCare alone added more than 81,000 new enrollees in Medicaid, Medicare Advantage and individual plans. Minnesota is going through several procurement processes for Medicaid and other public programs in 2021 and 2022, and these contracts represent billions in potential revenues for health plans.
  • Medicare health plans added about 52,000 members between January 2020 and 2021. UCare added about 12,000 to its HMOs and Blue Cross Blue Shield added about 16,000, mostly in PPO plans. Humana lost about 10,000 Medicare enrollees, partly because some major providers chose not to participate in its networks.
  • Enrollment continued to grow in individual and Medicaid plans in the first quarter of 2021. Individual plans added about 12,000 enrollees in the most recent open enrollment, while Medicaid added 27,000 new members in managed care plans.
Note: Product cover images may vary from those shown

FEATURED COMPANIES

  • Blue Cross Blue Shield
  • Humana
  • Medica Insurance Company
  • UCare
  • MORE

1. Introduction

2. Market Structure

  • Health Plan Companies
  • Network Arrangements and Provider Systems

3. Trend Review

  • Health Plan Enrollment
  • Individual Markets and MNsure
  • State Healthcare Programs
  • Medicare Health Plans
  • Health Plan Net Income
  • Financial Results by Line of Business
  • Administrative Expenses
  • Health Plan Capital

4. A Look Ahead

Note: Product cover images may vary from those shown
  • Blue Cross Blue Shield
  • Humana
  • Medica Insurance Company
  • UCare 
Note: Product cover images may vary from those shown

The reports analyzing state health care markets are intended to be a resource to health care organizations facing a full range of challenges but also seeking to identify and benefit from opportunities that present themselves. 

This report is presented in three main sections. The first part, Market Structure, describes the major health insurers and hospital systems in the state, showing recent entrants and the high-level of consolidation that has occurred in both the health plan and provider markets. Market Trends, the next section, presents our analysis of enrollment trends and financial results for the health insurers. The last section contains our analysis of financial and inpatient utilization data on the hospitals in the state.

The analysis of health plan companies is based on their annual and quarterly statements filed with the Department of Insurance, including forms prescribed by the National Association of Insurance Commissioners and supplemental reports required by the state. The publisher also uses Medicaid data from the Department of State Health Services and Medicare health plan and hospital data from the Centers for Medicare and Medicaid Services. The publisher has that data together with insights that they have gained in interviews with dozens of leaders in health care organizations in the state.

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