Insurers Post Modest Gains Amid Record Unemployment

June 10, 2009 -- Job losses only had a slight impact on the enrollment numbers of commercial health plans during the first three months of the year. Slightly over 1.8 million Oregonians had health insurance on March 31.

 

When all the numbers were tabulated, only 35,895 people lost coverage – representing a 2 percent drop. Regence BlueCross BlueShield was the biggest loser – its numbers fell by 29,857 and its profit barely stayed in the black, while HealthNet carried the day, growing by 9,648.

 

PacifiCare, a for-profit insurance company, had the lowest enrollment -- 26,662 members -- but actually ended up with the highest profit margin – 8.1 percent – and spent the least amount on medical, hospital or pharmaceutical expenditures – keeping 26.5 percent of its revenue in-house.

 

Kaiser Permanente managed to eke out a 2.5 percent profit while spending the most on health care services among its competitors, and only lost 220 members in Oregon and southwest Washington since year’s end.

 

HealthNet tied with Providence – coming in with a negative 1.1 profit, while their medical loss ratios (the amount of premium spent on healthcare) were nearly equal.

 

LifeWise seemed to take the biggest hit in profitability, down by 2.5 percent after losing 5,407 members, and kept its medical spending in the mid-range, 85.3 percent. 

 

Neither ODS Health Plan nor PacificSource suffered a financial loss during the first quarter. But ODS was the only other insurer to grow its ranks by 1,389 while PacificSource lost 5,876 members.

 

Of course, none of these enrollment numbers include self-insured employers who aren’t required to report such data to the state’s Insurance Division.

 

ODS Health Plan also reported expenses and earnings from its administrative services contract (ASO) business – better known as its self-insured plan.

 

In 2008, it was reimbursed $229,426,795 and its claims and administrative costs reached $227,523,112 – leaving a profit of $1,903,683.

 

In a similar fashion, ODS Dental Service earned a profit of $283,226 in 2008 on its ASO business, with $65,069,988 in costs, while its reimbursements were $65,353,214.

 

PacificSource set aside $2,270,312 in deferred compensation, compared to $2,250,384 in 2008, while Regence BlueCross BlueShield put $1,511,293 into deferred compensation for its executives and directors, and another $2,662,765 for its physicians. Comparable figures appeared for 2008 as well – Regence’s executives had $1,793,219 set aside in 2008, and physicians, $2,646,476. There was no explanation as to when those monies would be disbursed.

 

HealthNet, meanwhile, earned pharmacy rebates of $823,893 during the first three months of 2009. The previous year, its rebates totaled $3,646,529 and, in 2007, $4,090,731. No other health plan reported similar information.

 

However Kaiser spent a considerable chunk of money on medical office operations -- $129,318,135 during the first quarter of 2009 compared to $527,253,233 in 2008. Its public and professional liability costs were $2,035,218 as of March 31 and $3,726,867 the previous year.

 

These numbers are courtesy of the Oregon Insurance Division.