Losses mount at Oregon health insurers

State’s nine largest insurers report losses of $105.97 million during first six months of 2015, as membership levels generally hold steady

This is shaping up to be a financially brutal year for Oregon’s major health insurance companies. Since Jan. 1, the nine-largest traditional insurers in the state have reported cumulative losses of $105.97 million.

The good news: They can take the losses, at least for now. State regulators require them to have robust reserves, and most insurers opt to set aside far more than is required.

But the financial reports the state’s insurers were required to file this week also raise questions about how the Affordable Care Act is changing the traditional world of comprehensive health insurance in Oregon, at a time of consolidation among big insurance companies across the U.S.

The figures show that Oregon’s largest insurers, which at times have seen wide swings in membership numbers, have largely treaded water in recent months with member counts fairly flat at Kaiser Permanente, Moda Health Plan, Regence BlueCross BlueShield of Oregon, Providence Health Plans, PacificSource Health Plans, LifeWise Health Plan of Oregon and Health Net Health Plan. The biggest swings were seen at tiny startups Health Republic and Oregon’s Health CO-OP, where even small changes in enrollment numbers can have a significant impact.

Ranked by total number of people covered, Kaiser Permanente and Regence BlueCross BlueShield of Oregon hold on to their spots as the state’s two largest insurance companies – but that doesn’t tell the whole story.

Only a third of the health plans Regence BCBS reports issuing are for the traditional comprehensive health plans we usually think of when we consider insurance. The Portland-based nonprofit insurer, which is owned by Cambia, includes 57,501 vision plans, 39,508 dental plans and 66,370 Medicare plans in its grand-total membership count.

At Kaiser, by contrast, 79 percent of members are enrolled in comprehensive insurance plans; at Moda the figure is 98 percent.

Ranked by how many people are covered through employer or individual comprehensive health plans, here are Oregon’s largest health insurance companies as of June 30:

1. Kaiser Permanente, with 374,573 members in comprehensive plans, and 98,138 in other plans.

2. Moda Health Plan, with 217,181 members in comprehensive plans, and 3,995 in other plans.

3. Regence BlueCross BlueShield of Oregon, with 165,324 members in comprehensive plans, and 330,957 in other plans.

4. Providence Health Plan, with 162,691 members in comprehensive plans, and 49,714 in other plans.

5. PacificSource Health Plans, with 117,462 members in comprehensive plans, and 39,550 in other plans.

6. LifeWise Health Plan of Oregon Inc., with 64,554 members in comprehensive plans, and 8,861 in other plans.

7. Health Net Health Plan of Oregon Inc., with 48,155 members in comprehensive plans, and 31,580 in other plans.

8. Health Republic, with 13,328 members in comprehensive plans, and no other members.

9. Oregon's Health CO-OP, with 13,303 members in comprehensive plans, and no other members

See the attached spreadsheet to examine total enrollment and basic financial details for these insurers.

These numbers don’t tell the whole story. Many people at large employers like Nike, Intel, the state’s teachers and state employees receive health insurance through self-funded employer plans, and those figures are not reported to the National Association of Insurance Commissioners. In addition, the coordinated care organizations born as a result of the Affordable Care Act do not report their finances to the NAIC, and use different forms and definitions when they issue financial updates to the state.

Nonetheless, the quarterly NAIC filings obtained by The Lund Report for this examination provide one of the best available windows into the shifting world of Oregon health insurance. They show that the state’s major insurance companies cumulatively signed up 6,254 people for new insurance plans between April 1 and June 30 of this year – 1,270 of them in comprehensive health plans.

Kaiser Pemanente

Kaiser was one of only three Oregon insurers to report a profit during the second quarter of 2015. It cleared $8.2 million after expenses, but is still behind for the year because of a $21.3 million net loss in the first quarter of the year.

Enrollment in Kaiser’s comprehensive insurance plans dropped 0.7 percent in the three months ending June 30, to 374,573. Total enrollment was down 0.4 percent, to 472,711 members.

Moda Health Plan

Moda’s net financial loss was $6.1 million in the second quarter of this year, compared to a second-quarter profit of $815,210 last year.

Enrollment in Moda’s comprehensive insurance plans edged up 0.2 percent, to 217,181. Total enrollment across all plans was up 0.3 percent, to 221,176.

Regence BlueCross BlueShield

Regence BCBS was one of only three Oregon insurers to report a profit during the second quarter of 2015, when it cleared $10.2 million after expenses – up from $6.6 million during the same period in 2014. But the insurer is still in the red for the year after a $14.5 million net loss in the first quarter.

Enrollment in Regence BCBS’ comprehensive insurance plans inched down 0.1 percent in the second quarter, to 165,324. Total enrollment across all plans was down 0.8 percent, to 496,281.

Providence Health Plan

Providence’s net financial loss was $12.7 million in the second quarter of this year, compared to a $15.2 million profit in the same period of 2014.

Enrollment in Providence’s comprehensive insurance plans was up 1.6 percent in the second quarter, to 162,691. Total enrollment across all plans was up 1.4 percent, to 212,405.

PacificSource Health Plans

PacificSource was one of only three Oregon insurers to report a profit during the second quarter of 2015, when it cleared $817,452 after expenses – compared to a $1.6 million profit in the same period of 2014. It’s still negative for the year after a $7.1 million net loss in the first quarter of this year.

Enrollment in PacficSource’s comprehensive insurance plans was down 0.7 percent, to 117,462. Total enrollment across all plans was down 2.3 percent, to 157,012.

LifeWise Health Plan of Oregon

LifeWise’s net financial loss for the second quarter was $10.1 million, compared to a $1.2 million net loss during the same period a year ago.

Enrollment in LifeWise’s comprehensive insurance plans was down 2.3 percent, to 64,554. Total enrollment across all plans was down 2 percent, to 73,415.

Health Net Health Plan

Health Net’s net financial loss for the second quarter was $2.5 million, compared to a $9.9 million profit in the same period of 2014.

Enrollment in Health Net’s comprehensive insurance plans was down 1.6 percent, to 48,155 members. Total enrollment across all plans was down 0.3 percent, to 79,735.

Health Republic

Health Republic, created in response to the Affordable Care Act, reported continued financial losses – as expected for an early-stage insurer – but also saw strong growth in member enrollments. Its net financial loss for the second quarter was $2.4 million, compared to a net loss of $1.96 million in the same period of 2014.

Health Republic saw enrollment climb 8.4 percent in the second quarter, to 13,328 members. It only issued comprehensive health insurance policies.

Though in other states some insurers created under the ACA have indicated that financial losses are too much to continue operating, Health Republic’s financial disclosures suggest a startup that is gaining strength. Its net assets climbed from $38.1 million at the end of last year to $40.9 million on June 30 – though in a worrying sign, it is not yet generating cash from its operations.

Oregon’s Health CO-OP

Also created in response to the Affordable Care Act, Oregon’s Health CO-OP saw continued financial losses, as expected, but also saw membership enrollment grow. Its net loss for the second quarter was $3.2 million, compared to a $142,714 net loss during the same period last year.

Oregon’s Health CO-OP saw enrollment climb 4.4 percent in the second quarter, to 13,303 members. It only issued comprehensive health insurance policies.

Though in other states some insurers created under ACA have indicated that financial losses are too much to continue operating, Oregon’s Health CO-OP shows no signs of flagging. Its assets climbed to $32.7 million as of June 30, up from $18.2 million at the end of last year, and it has started generating cash from operations.

Courtney Sherwood can be reached at [email protected]. Follow her on Twitter at @csherwood.

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