Regence Regains its Lead While Losing Individual Members

At the same time, Regence is the only nonprofit insurer in Oregon not participating in coordinated care organizations, which provide services to people on Medicaid
The Lund Report

January 2, 2013 -- Regence BlueCross BlueShield took back its spot as Oregon’s top provider of health insurance, though its ongoing battle for market dominance remains a near-tie with previous leader Kaiser Permanente. Oregon’s health reform efforts played a major role pulling Kaiser down from the top position.

Coordinated care organizations began insuring the majority of the state’s Medicaid members in the third quarter, removing 13,503 people from Kaiser’s official Oregon rolls. In all, 650,000 people on Medicaid are in CCOs. Kaiser is a member of Health Share of Oregon, the state’s largest CCO. The creation of CCOs means that it’s no longer possible to tally how many Oregon Health Plan – or Medicaid – members receive care through Kaiser by reviewing the quarterly financial reports it submits to the state Insurance Division. requires with the state Insurance Division. Of Oregon’s seven largest insurers, Kaiser had been the only company reporting a population of Medicaid members.

ODS, PacificSource and Providence also participate in coordinated care organizations. Regence BlueCross BlueShield of Oregon does not cover people on Medicaid and is not participating in CCOs, and is the only major nonprofit health insurer in the state to opt out of this aspect of healthcare reform.

As of Sept. 30, here’s how Oregon’s big seven health insurers ranked:

  1. Regence BlueCross BlueShield of Oregon: 474,796 members, up 3.5 percent over the previous three months.

  2. Kaiser Permanente: 462,796 members, down 2.9 percent.

  3. PacificSource Health Plans: 219,484 members, essentially unchanged.

  4. Providence HealthPlan: 185,661 members, essentially unchanged.

  5. HealthNet Health Plan of Oregon, 87482 members, essentially unchanged

  6. ODS Health Plan Inc.: 72,852 members, up 1.7 percent.

  7. LifeWise Health Plan of Oregon Inc: 52,851 members, down 1.7 percent.

The nonprofit that climbed to the top of the leader board was vague about the details. Regence BlueCross BlueShield continued to shed individual plan members, as it has been for months. Enrollment in these plans is down from 62,008 at the start of the year to 59,179 as of Sept. 30. Most of Regence’s other Oregon insurance categories were fairly stable in the third quarter, with group, Medicare, vision and dental plans only growing or shrinking by a few hundred members. But Regence reported signing on 15,658 new members whose coverage did not fall into any of these common categories. The insurer simply classified these members as participating in “other” plans, and did not provide additional information.

Of the state’s largest insurers, only Regence and PacificSource said they had members in the “other” category. PacificSource insured 10,574 of these people, a number that has been stable all year.

Quarterly state filings provide an imperfect window into the state’s insurance population. They only include people on traditionally underwritten insurance plans. Many large employers are self-insured, including the state of Oregon itself – which covers 127,000 employees and their dependents whose details are not included on insurance company finance reports -- and also including businesses like Nike and Intel. Nonetheless, these documents do illustrate shifts in market share and also provide one of the few available windows into the finances of the state’s insurers.

Quarterly filings show that for the state’s largest insurers, profit margins remain razor thin. Kaiser’s profit margin was a mere 0.66 percent, and Regence BlueCross BlueShield’s was 1.7 percent. PacificSource and ODS both reported quarterly losses.

PacificSource had already been in the red, and deepened its losses by $3.7 million. From January through Sept. 30, it has reported a cumulative net loss of $7.9 million on $537 million in revenue. The insurer has been growing rapidly in recent years, and has enrolled roughly 7,300 individuals and 9,700 group plan members since Jan. 1. Chief Financial Officer Peter Davidson told Oregon Healthcare News that he attributes the losses to increased claims expenses. In spending 89.3 percent of premiums on medical care PacificSource was among the more financially efficient insurers in the state.

ODS, the other insurer that reported a third-quarter net loss, actually spent more on medical care than it collected in premiums. It lost $3.8 million in the quarter, pulling it into the red for the entire year. The company has reduced its debt held in surplus notes by $13 million this year – that debt is now paid off, and should cut expenses in the future. The company also said it spent more related to healthcare reform, which has pushed up administrative expenses. ODS added 9,118 new members from the start of the year through Sept. 30, enrolling roughly 1,600 individuals and about 7,260 group-covered people to its plans, as well as more than 200 Medicare participants.

PacificSource reported $2.4 million in deferred compensation liability and Kaiser reported $388.1 million in post-retirement and pension liability. Regence reported that its assets included $4.3 million in assets that will be used for deferred compensation.

Providence Health Plan had the highest capital and surplus levels, per member, of the state’s largest insurers. Its $408.9 million amounted to $2,476 per member. Though Kaiser and Regence had more capital and surplus -- $511.7 million at Kaiser, $581.3 million at Regence -- they also have more members, so the per-member capital/surplus levels were lower -- $1,106 at Kaiser and $1,224 at Regence.

HealthNet Health Plan spent just shy of 80 cents of every premium dollar on medical care, the least of any of Oregon’s major insurers. Though profitable, its third-quarter net income declined by 20 percent in the third quarter, to $3.4 million. Membership levels have bounced up and down in recent months, but remained relatively stable.

 

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