More than 90,000 Oregonians left traditional health insurance plans in the first three months of 2016, a further sign of the continuing turmoil the Affordable Care Act has introduced to the industry.
The state’s ten largest traditional insurance companies – plus Health Republic, which stopped offering plans as of Jan. 1 – saw enrollment drop from 1.75 million people at the end of last year to 1.66 million as of March 31, according to health insurance financial reports filed with regulators this week.
It’s not entirely clear where the missing 91,658 have gone – coordinated care organizations, Medicare and self-funded employer plans are likely all part of the equation.
Coordinated care organizations, the Medicaid-funded plans that enroll people with low or no incomes, had 954,735 members as of April 15 this year – a gain of 41,117 people, according to Oregon Health Authority figures. Enrollment in Medicare, which serves people age 65 or older, climbed by 4,194 people over the first three months of 2016, to 768,958 Oregonians, according to the Centers for Medicare and Medicaid Services.
If CCOs and Medicare account for roughly 45,300 people leaving traditional insurance plans, that still leaves about 46,360 unaccounted for. Many may be covered by self-insured employers, whose plans and enrollment figures are not public record.
Whatever is behind the continuing shift, Oregon’s leading insurers are battling to hold on to members, with mixed success that has been accompanied by financial challenges nearly across the board. Only Providence Health Plan reported a profit in the first quarter of 2016, and half the state’s insurers saw enrollment drop. Here’s a closer look at how Oregon’s insurers fared in their most recent financial reports.
Atrio Health Plans Inc
Owned jointly by Marion Polk Community Health Plan Advantage Inc., Cascade Comprehensive Care Inc. and Architrave Health LLC (which also owns the Umpqua Health Alliance, a CCO), Atrio Health Plans have historically focused on Medicare coverage. This quarter, The Lund Report is adding Atrio to its insurance company analysis, after it made a push to boost enrollment in traditional health insurance plans.
Individual enrollment in Atrio’s comprehensive plans climbed from 253 people on Dec. 31, 2015, to 2,202 as of March 31.
Atrio’s benefit expense ratio, which divides costs associated with providing health services by revenue from member premiums, was 84.3 percent.
- Net loss, first quarter of 2016: $1.6 million, compared to a $1.4 million loss in the first quarter of 2015.
- Cash & equivalents on March 31: $12.9 million, down 0.62 percent from a year earlier.
- Total members on March 31: 19,658, up from 15,586 as of Dec. 31, 2015.
Health Net Health Plan
Health Net Health Plan is owned by QualMed Inc., a subsidiary of Delaware-based Centene Corp,, which acquired the Oregon insurance company’s parent – also called Health Net – on March 24 of this year, following an announcement in July 2015.
Health Net Health Plan disclosed that it paid $25,896 in fines and penalties in the first three months of 2016, but did not elaborate on those charges.
In the first quarter of this year, the company added 9,320 new members, despite seeing individual plan enrollments shrink slightly – down by 572, to 841. It added 2,421 new comprehensive group plan enrollments, climbing to 28,257 members, and also added 6,095 new Medicare enrollments, climbing to 31,992 members in this category. (Changes are all from Dec. 31 to March 31)
Health Net’s benefit expense ratio, which divides costs associated with providing health services by revenue from member premiums, was 110.3 percent.
- Net loss, first quarter of 2016: $19.8 million, compared to a $4.5 million net loss in the first quarter of 2015.
- Cash & equivalents on March 31: $10.7 million, down from $13.4 million a year earlier.
- Total members on March 31: 89,613, up from 80,294 as of Dec. 31, 2015.
Health Republic
Health Republic, created under provisions of the Affordable Care Act, was fatally injured when cuts to risk corridor reimbursements it had been counting on imperiled its bottom line last year. It was placed under administrative supervision by the Oregon Insurance Division, and in October Health Republic announced it was done enrolling new Oregonians in its plans.
In the first quarter of 2016, Health Republic reported on its financial situation as it continued to wrap up operations with no remaining insured members.
- Net loss, first quarter of 2016: $473,770, compared to a $3.3 million loss in the first quarter of 2015.
- Cash & equivalents on March 31: $1.8 million, down 82.6 percent from a year earlier.
- Total members on March 31: None, after ending 2015 with 11,660 people still on the books.
Kaiser Permanente
While self-funded group plans that businesses pay insurance companies to administer are not generally a matter of public record, Kaiser’s Northwest health plan revealed in its first-quarter financial report that it had an average of 11,757 people enrolled in these self-funded group plans in the first quarter of 2016.
Those figures are not included in Kaiser’s official enrollment figures which show that the giant health care nonprofit’s Oregon operations added 13,081 new members in the first three months of this year. Nearly all of that growth was among individuals buying their own plans – who accounted for 38,262 Kaiser members as of March 31, up by 11,678 people since the start of the year.
Kaiser’s benefit expense ratio, which divides costs associated with providing health services by revenue from member premiums, was 97.76 percent.
- Net loss, first quarter of 2016: $4.7 million, compared to a $21.2 million loss in the first quarter of 2015.
- Cash & equivalents on March 31: $7.04 million, down 49.8 percent from a year earlier.
- Total members on March 31: 488,675, up from 475,594 as of Dec. 31, 2015..
Moda Health Plan
Although Moda Health Plan has so far weathered a financial crisis that prompted regulators to intervene, it has done so at a cost to its enrollment. The company, which is owned by Moda Inc., lost roughly 73,000 members in the first three months of the year.
This January, it briefly appeared that Moda would be forced to exit the individual health insurance market because of regulators’ concerns about its financial position. In February, state officials announced that Moda would continue operating in Oregon, after it developed a plan to improve its capital position with the help of its parent company.
Moda Inc, also owns several dental companies, Healthy Grid LLC, PayLess Drug Stores Inc. and other subsidiaries.
According to its financial report, Moda has been bolstering its cash reserves, which climbed by $86.5 million in the first three months of this year, after dropping by $116.95 million across all of 2015.
During the first quarter of this year, Moda converted $80 million of surplus notes from its parent company to contributed capital, a move that bolsters its financial position.
It reported a considerable increase in cash and equivalents on the books, which climbed $68.2 million, from negative $32.9 million at the start of the year to positive $35.3 million as of March 31.
Moda’s benefit expense ratio, which divides costs associated with providing health services by revenue from member premiums, was 101.52 percent.
- Net loss, first quarter of 2016: $31.1 million, compared to a $27.7 million loss in the first quarter of 2015.
- Cash & equivalents on March 31: $35.3 million, up from negative $37.2 million a year earlier.
- Total members on March 31: 143,266, down from 216,267 as of Dec. 31, 2015.
LifeWise
In its advertisements, LifeWise Health Plan of Oregon brands itself as “boringly good.” Not everything about LifeWise’s financial situation is necessarily good, but it’s certainly unexciting.
Like nearly every other insurer in the state, LifeWise posted a net loss for the first three months of this year, of $3.6 million. Its benefit expense ratio, which divides costs associated with providing health services by revenue from member premiums, was 95.21 percent. Enrollment figures dropped substantially, with membership falling by 39.4 percent in the first three months of the year.
But beyond those disclosures, little sticks out from LifeWise’s financial report.
- Net loss, first quarter of 2016: $3.6 million, compared to a $8.3 million loss in the first quarter of 2015.
- Cash & equivalents on March 31: $10,4 million, up 5.2 percent from a year earlier.
- Total members on March 31: 39,997, down from 66,007 as of Dec. 31, 2015.
Oregon’s Health CO-OP
Created after the Affordable Care Act established a new tax-exempt category for health insurance nonprofits that receive “consumer oriented and operated plan” (or co-op”) program grants or loans and meet other requirements, Oregon’s Health CO-OP has grown its member rolls significantly.
In its report to regulators, the insurer disclosed that in April 2016 it: “entered into a letter of intent to develop a new population health partnership with OHSU, Salem Health, Tuality Health and Adventist Health System effective for the 2017 year. Under the proposed arrangement, the CO-OP will offer an insurance product that features an integrated network of providers across the Portland metro area and Salem, to improve outcomes and access. The partners would share in the financial performance of the product, which will create aligned incentives for care coordination and shared accountability for costs and care among the CO-OP members and providers.”
Oregon’s Health CO-OP’s benefit expense ratio, which divides costs associated with providing health services by revenue from member premiums, was 109.78 percent.
- Net loss, first quarter of 2016: $420,084, compared to a $1.7 million loss in the first quarter of 2015.
- Cash & equivalents on March 31: $6.96 million, up 33.9 percent.
- Total members on March 31: 21,847, up from 15,039 as of Dec. 31, 2015.
PacificSource Health Plans
An 83-year-old Oregon based company that operates two coordinated care organization plans in addition to its health insurance company, PacificSource saw its private-insurance enrollments drop by 7,457 members in the first quarter of this year.
The company’s cash and equivalents on the books dropped significantly last year and started to rebound in the first quarter of this year. From $40.6 million on March 31, 2015, cash and equivalents dropped to $13 million on Dec. 31, 2015 then climbed to $18.1 million as of March 31 this year.
Pacific Source’s benefit expense ratio, which divides costs associated with providing health services by revenue from member premiums, was 82.2 percent.
- Net loss, first quarter of 2016: $5.97 million, compared to a $7.1 million loss in the first quarter of 2015.
- Cash & equivalents on March 31: $18.1 million, down 55.3 percent from a year earlier.
- Total members on March 31: 161,023, down from 168,480 as of Dec. 31, 2015.
Providence Health Plan
Providence Health Plan was the only major Oregon insurer to report a profitable first quarter of the year – but its $6.6 million in net income would have been much lower excluding a business decision made by the Catholic nonprofit.
Providence transferred its Medicare Advantage contracts to sister company Providence Health Assurance, which used to be included on the health plan’s books. Without that transfer, Providence Health Plan’s profit would have been reduced to about $600,000.
Although that shift removed about Medicare Advantage 48,224 members from Providence Health Plan’s rolls, its overall membership numbers still went up, due to growth in individual and group comprehensive plan enrollments. It added 42,693 new members in the first quarter at a time when all but the smallest health insurers were watching their enrollment fall.
Providence’s benefit expense ratio, which divides costs associated with providing health services by revenue from member premiums, was 87.7 percent.
- Profit, first quarter of 2016: $6.6 million, up from a $274,935 profit in the first quarter of 2015.
- Cash & equivalents on March 31: $52.3 million, down 38.4 percent from a year earlier.
- Total members on March 31: 261,114, up from 218,421, as of Dec. 31, 2015
Regence BlueCross BlueShield of Oregon
A subsidiary of Portland-based regional insurance giant Cambia, Regence BlueCross BlueShield reported an alarming cash situation as of March 31 – though its deep pocketed parent company may be well-positioned to bolster any financial problems that result.
Regence BCBS was the only insurer to report a negative cash balance as of March 31. Its cash and equivalents were negative $11.96 million, worse than the negative $9.8 million Regence ended 2015 with, and far below the $28.8 million positive balance it reported for this line item as of March 31, 2015. Enrollment also fell during the period.
The company’s benefit expense ratio, which divides costs associated with providing health services by revenue from member premiums, was 81.66 percent.
- Net loss, first quarter of 2016: $12.7 million, compared to a $14.5 million loss in the first quarter of 2015.
- Cash & equivalents on March 31: Negative balance of $11.96 million, compared to a positive balance of $28.8 million a year earlier.
- Total members on March 31: 474,556, down from 486,267 as of Dec. 31, 2015.
Zoom Health Plan
Zoom Health Plan is finally beginning to see enrollment figures that match its flashy marketing campaign. A for-profit plan 20 percent owned by two Endeavour Capital private equity funds, and 80 percent owned by ZoomCare founders doctors Albert DiPiero and David Sanders, the Zoom Health Plan is bringing a very different take on integrated insurance-and-clinics to Oregon.
Unlike Kaiser and Providence, which both own massive hospitals and campuses, Zoom’s insurance plan sends members to a network of small neighborhood-based high-tech medical offices. It was launched last year, and ended 2015 with just 217 members enrolled.
As of March 31, Zoom Health Plan had 2,421 members. Of those, 1,636 were enrolled in individual plans, and 785 in group plans.
Like nearly every other insurer in the state, Zoom posted net losses in the first quarter of this year. But those losses are less revealing at Zoom than at its competition, as startups frequently spend more than they earn to fuel early stage growth.
Zoom Health Plan’s benefit expense ratio, which divides costs associated with providing health services by revenue from member premiums, was 82.66 percent.
- Net loss, first quarter of 2016: $531,648, compared to a $546,554 net loss in the first quarter of 2015.
- Cash & equivalents on March 31: $4.95 million, up 17.9 percent.
- Total members on March 31: 2,421, up from 217 as of Dec. 31, 2015.
Courtney Sherwood can be reached at [email protected]. Follow her on Twitter at @csherwood.
Correction: Figures for Providence's March 31, 2016, and Dec. 31, 2015, membership enrollment were reversed in an earlier version of this story.
