1,582 Private Health Insurance Enrollments Climb 66,268 in 2014

Financial analysis shows big sales by Regence BlueCross BlueShield of Oregon, continued financial losses for Kaiser Permanente

The ranks of the privately insured continued to grow in Oregon last year. Yes, the coordinated care organizations created by the Affordable Care Act have covered hundreds of thousands of poor and low-income people in the state, but a review of health insurance financial reports shows that tens of thousands of other Oregonians are also gaining access to coverage.

From 2013 to 2014, total enrollment in the state’s CCOs climbed by 208,669, while enrollment in traditional Oregon-based health insurance plans grew by 66,268.

Here’s a look Oregon’s health insurers and how their enrollments have changed over the past year, ranked by total members as of Dec. 31, 2014.

1. Regence BlueCross BlueShield of Oregon, 472,034 members, down 25,857 from Dec. 31, 2013.

2. Kaiser Permanente: 468,368, down 4,333.

3. Moda Health Plan: 207,849, up 121,560.

4. Providence Health Plan: 187,411, up 3,606.

5. PacificSource Health Plans: 167,531, down 39,444.

6. HealthNet Health Plan of Oregon Inc.: 73,002, up 3,209

7. LifeWise Health Plan of Oregon Inc: 46,528, down 4,379.

8. Trillium: 93,370, up 35,476. (Also listed as a CCO)

9. Atrio: 13,728, up 690.

10. Health Republic: 8,813, up from no members at the end of 2013.

11. Samaritan: 4,929, up from no members at the end of 2013.

12. Oregon’s Health Co-Op, up from 1,582 members at the end of 2013.

This story is an analysis of health insurance companies organized under the laws of Oregon, drawing from the annual statements they file with the National Association of Insurance Commissioners, but it’s worth noting that these insurers are part of an increasingly health coverage landscape.

In the world of private insurance, many large employers choose to be self-insured. These self-insured organizations pay Regence BlueCross BlueShield, Kaiser, Providence and other traditional insurers to administer their health plans, but the employers actually act as the insurers, accepting the financial risk that they may have to pay out high claims in hopes that a healthy workforce will actually save them money. There are no good numbers available on who covers the most Oregonians through self-insured workplace plans, but tens of thousands of people seem to be enrolled in these plans, which are offered to state government employees, as well as to people at major businesses like Nike and Intel.

A handful of out-of-state companies sell plans in Oregon but don’t report detailed information to regulators about their operations here because most of their business is elsewhere. They are not included in this story.

And, as The Lund Report’s coverage of Affordable Care Act-created coordinated care organizations showed last week, a relatively new raft of Medicaid-funded healthcare groups serving the state’s poor and low-income residents is also providing coverage to a large number of Oregonians.

Here’s how many people were enrolled in each Oregon CCO as of Jan.15, according to an Oregon Health Plan report:

1. Health Share of Oregon: 236,752.

2. Family Care CCO: 117,805.

3. Willamette Valley Community Health: 98,336.

4. Trillium Community Health Plan: 90,742. (Trillium files traditional health-insurance financial reports, and so is included in this story as well as last week’s coverage of CCOs.)

5. Intercommunity Health Network: 56,311.

6. PacificSource Community Solutions – Central Oregon: 51,504.

7. Allcare Health Plan: 49,161.

8. Eastern Oregon CCO: 45,495.

9. Jackson Care Connect CCO: 30,412.

10. Columbia Pacific CCO: 28,425.

11. Umpqua Health Alliance: 25,507.

12. Yamhill Community Care: 24,129.

13. Western Oregon Advanced Health: 20,776.

14. Cascade Health Alliance: 17,181.

15. PacificSource Community Solutions – Columbia Gorge: 12,390.

16. PrimaryHealth of Josephine County: 11,201.

Click here to read the full story on Oregon’s CCOs.

Here’s a closer look at how Oregon’s largest health insurance companies performed in 2014. Click here to view a spreadsheet that provides greater detail on these companies.

Regence BlueCross BlueShield of Oregon

Regence BCBS of Oregon nearly doubled its profit, also called net income, from one year to the next. The company reported a $35.9 million profit in 2014, compared to $17.97 million in 2013.

Regence BCBS, a nonprofit owned by Cambia Health Solutions, also disclosed on its annual report that last year it sold off its 7 percent stake in TZ Holdings, owner of TriZetto Software, for $116.1 million – a net gain of $50.9 million. TriZetto is a major healthcare IT company.

ApaxFunds of Colorado, along with Cambia’s family of insurers and also Regence BlueCross BlueShield acquired a majority of TZ Holdings back in 2008. These investors sold majority control of TriZetto to Cognizant Technology Solutions Corp. for a combined total of $2.7 billion, according to an Apax press release.

Regence BCBS’s proceeds from the sale likely contributed to its higher profit last year. It’s worth noting that this insurer spent $1.62 billion on hospital and medical care, out of $1.87 billion in revenue. Its 1.9 percent profit margin – which would be considered razor thin in most industries – was fairly typical for a large Oregon health insurer.

Kaiser Permanente of the Northwest

Kaiser Permanente is still operating in the red. After reporting a net loss of $14.9 million in 2013, the state’s second-largest health insurer by enrollment reported 2014 net loss of $15.6 million.

As with all the state’s big insurers, Kaiser has vast financial reserves and investments that buffer it from losses like these. The nonprofit’s investments also helped relieve some of the financial pressure - investment gains contributing $20.5 million to the bottom line, which offset a $35.6 million underwriting loss.

With capital and surplus of $203.2 million as of Dec. 31, 2014, Kaiser can withstand financial losses – but that buffer is not what it used to be. On Dec. 31, 2013, the insurer’s capital and surplus stood at $480.1 million. Pension and retirement-plan related write-downs are responsible for much of that decline.

Moda Health Plan

The meteoric rise of the health insurance company formerly known as ODS continued in 2014, as Moda offered low-cost plans on Oregon’s health exchange and ended its first full year as the chief sponsor of the city’s National Basketball Association arena. Moda’s membership climbed an astounding 140 percent last year, to 207,859, making it the state’s third-largest health insurance company.

The company has proved willing to pay to boost its visibility. Though it has not disclosed how much it spent to secure naming rights to the Moda Center beginning in 2013 (formerly the Rose Garden Arena), The Oregonian estimated the value of the 10-year deal to be $40 million. Moda says it spent $3.3 million on marketing and advertising last year.

Step back in time just a few years, and it was a different story: At the end of 2011, Moda was better known for its dental plans than its health insurance, had just 63,734 people enrolled, and ranked sixth out of the state’s seven biggest private insurance companies.

But last year’s membership growth came at a financial cost. Moda reported a net loss of $4.4 million, compared to a profit of $7.5 million in 2013. Nonetheless, Moda’s capital and surplus climbed last year – from $74.9 million, to $28.8 million.

Providence Health Plan

Providence Health Plan, owned by nonprofit five-state Providence Health & Services, has been a steady and consistent present in Oregon for many years, with enrollment numbers that edged up and down from year to year, but remain remarkable close to where they were five years ago. In 2011, Providence reported 185,597 people enrolled in its plan. Last year, that number was 187,411.

Providence Health Plan reported a $22.3 million profit in 2014, with a 2 percent profit margin, and listed no unusual or noteworthy changes or transactions in its annual financial report to the National Association of Insurance Commissioners.

PacificSource Health Plans

On the surface, PacificSource seems to be falling fast: Though doing well financially, the company reported a 19 percent drop in member enrollment over the past year, to 167,531 people covered as of Dec. 31, 2014. But this 39,444-person enrollment decline appears to actually reflect a shift of strategy for PacificSource, which has moved into the world of coordinated care organizations.

PacificSource’s two CCOs, which operate under the “Community Solutions” name and are focused on central Oregon and the Columbia River Gorge, covered 63,894 people as of Jan. 15, according to an Oregon Health Plan report. That’s up from 48,639 a year earlier.

As we reported in last week’s story on CCOs, PacificSource CCO reported stable profits for each of the first three quarters of 2014, with a total net income of $13 million for the period. (Fourth-quarter CCO financial data is not yet available.)

In its report on its traditional health-insurance operations, PacificSource Health Plan said it had a $16.9 million profit in 2014, up 14.6 percent from the year before.

The little guys: steady startup growth

The Affordable Care Act created new opportunities for health-insurance “consumer operated an oriented plans” or “CO-OPs” to launch and grow, and Oregon’s two start-up co-ops both reported slow and steady membership growth after launching each year, though neither is yet profitable.

Health Republic had enrolled 8,813 members by the end of last year, from zero at the end of 2013. It reported a $14.1 million net loss. Financial losses are fairly common for new operations. This startup ended last year with capital and surplus of $6.3 million.

Oregon’s Health CO-OP grew from zero to 1,582 members over the course of last year. It reported a $6.8 million net loss, and ended the year with capital and surplus of $4.4 million.

To dig into the finances of Oregon’s other health insurers – including CCO Trillium, which we wrote about last week – click on the Excel spreadsheet that accompanies this story.

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Courtney Sherwood analyzes data and financial reports for The Lund Report. Follow her on Twitter at @csherwood. Student Thanh Mai provided data assistance with this analysis.

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