Oregon Insurers Report Slight Financial Improvements, as Many Continue to Operate at a Loss

Kaiser, Regence BlueCross BlueShield, BridgeSpan and Providence all reported profits in the first nine months of 2016, while five other insurance companies suffered financial losses

Profits are up at a handful of Oregon health insurance companies, and even those that are losing money seem to be stanching the flow of funds, according to financial reports filed this week with industry regulators.

Four companies – Kaiser Permanente, Regence BlueCross BlueShield of Oregon, BridgeSpan and Providence Health Plan – were profitable in the nine months from Jan. 1 through Sept. 30 of this year. Of the nine domestic insurance companies selling to groups and individuals in the state, only Regence BlueCross BlueShield reported profits during the same period last year.

Even still, a majority of the state’s insurers are spending more than they earn in revenue. Zoom Health Plan, LifeWise Health Plan, PacificSource Health Plans, Health Net Health Plan of Oregon and Moda Health Plan all reported net losses in the first nine months of this year – in each case, repeating a pattern of losses that continues from the same period in 2009.

Each company faces different challenges, and the figures reported in public documents do not necessarily tell the whole story. Moda’s losses grew deeper this year, even as the company worked to recover from major setbacks that led it to exit some states in 2015. Zoom Health Plan, by contrast, saw its losses shrink as its fledgling plan saw membership gradually tick up. And the figures reported by health insurance companies only show how their traditional health plans are performing – many companies also administer coverage for self-insured companies or government agencies, and profits or losses from those arrangements are not included in these figures.

The data available may be imperfect, but it still offers a snapshot of a changing industry.

Profits and losses in the first nine months of 2016

Many of the state’s insurance companies are still struggling to make profits, after the failures of Health Republic and Oregon’s Health CO-OP and the well-publicized setbacks faced by Moda. But more were profitable in the first nine months of this year than in the same period last year, and losses shrank at many that are still working to improve their financial outlook.

  1. Kaiser Permanente: $51.4 million profit, up from $13.7 million net loss in the same period in 2015.
  2. Regence BlueCross BlueShield: $22.9 million profit, down from $28.1 million profit in the same period in 2015.
  3. BridgeSpan: $6.2 million profit, up from $9.2 million net loss in the same period in 2015.
  4. Providence Health Plan: $2.5 million profit, up from $23.4 million net loss in the same period in 2015.
  5. Zoom Health Plan: $1.1 million net loss, compared to $2.6 million net loss in the same period in 2015.
  6. LifeWise Health Plan of Oregon: $7.8 million net loss, compared to $22.6 million net loss in the same period in 2016.
  7. PacificSource Health Plans: $10.5 million net loss, compared to $5.1 million net loss in the same period in 2015.
  8. Health Net Health Plan of Oregon: $27.6 million net loss, compared to $8.2 million net loss in the same period in 2015.
  9. Moda Health Plan: $33.5 million net loss, compared to $30.9 million net loss in the same period in 2015.

Spending on prescription drugs

At a recent Oregon Health Forum, Robert Judge, director of pharmacy services at Moda Health decried the challenges of restraining prescription costs. High-cost drug use among Moda patients increased 260 percent from 2010 to 2015, Judge said – yet these drugs are only used by 2 percent of patients. Figures reported by other health insurance companies suggest that Moda’s challenges may not be universal within the industry. It spent more per member each month on drugs than any other Oregon-based insurer, and its per-member monthly spending climbed 32.5 percent in this category.

  • Moda Health Plan: $74.05 per member per month, up 32.5 percent from a year ago.
  • Kaiser Permanente: $67.59 per member per month, down 4.8 percent from a year ago.
  • Health Net Health Plan of Oregon: $54.14 per member per month, up 4.1 percent from a year ago.
  • BridgeSpan: $45.82 per member per month, down 28.6 percent from a year ago.
  • Providence Health Plan: $44.53 per member per month, down 23.5 percent from a year ago.
  • LifeWise Health Plan of Oregon: $39.12 per member per month, up 44.6 percent from a year ago.
  • Regence BlueCross BlueShield of Oregon: $34.74 per member per month, down 2.1 percent from a year ago.
  • PacificSource Health Plans: $33.63 per member per month, down 14.45 percent from a year ago.
  • Zoom Health Plan: $16.12 per member per month, up 9.9 percent from a year ago.

Spending on hospital and medical benefits

It’s been widely speculated that Moda’s current financial troubles may result from its low-priced debut several years ago on the individual health insurance exchange – which could have attracted sick patients and people who had gone years without coverage. The data doesn’t show why the costs are what they are – rates negotiated by the insurance company with physicians and hospitals in its network could also be a factor -- but it certainly seems true that Moda patients cost the insurer more than patients in other health plans in Oregon.

Another high-spender in this category, Health Net Health Plan, may be spending more per patient each month than most of its competition because of its focus on older patients, who typically have more costly health needs than younger people. As of Sept. 30, 33,584 of Health Net’s 92,172 members were enrolled in its Medicare plan.

ZoomCare, which covered only 2,834 people as of Sept. 30, had the lowest per member monthly spending on hospital and medical benefits in the first nine months of 2016. With such a small population base, it’s impossible to gauge if the company’s neighborhood clinic model is responsible for keeping down costs, or if its members had fewer health needs than larger insurers.

  1. Moda Health Plan: $365.45 per member per month, up 68 percent from a year ago.
  2. Health Net Health Plan of Oregon: $302.36 per member per month, up 8.9 percent from a year ago.
  3. Kaiser Permanente: $261.48 per member per month, down 0.5 percent from a year ago.
  4. LifeWise Health Plan of Oregon: $225.47 per member per month, up 8 percent from a year ago.
  5. BridgeSpan: $177.07 per member per month, down 11.9 percent from a year ago.
  6. Providence Health Plan: $175.97 per member per month, down 31.3 percent from a year ago.
  7. Regence BlueCross BlueShield: $157.78 per member per month, down 0.7 percent from a year ago.
  8. PacificSource Health Plans: $155.90, down 4.7 percent from a year ago.
  9. Zoom Health Plan: $78.63 per member per month, down 66 percent from a year ago.

Providing individual health insurance

The Affordable Care Act did more than create coordinated care organizations to cover the health needs of low-income individuals. It also gave private insurers access to a vast market of individuals who could more easily access and afford coverage outside their employer.

Providence Health Plan, which now covers more people than any other insurer selling to the individual marketplace, has benefited from this shift: at the end of the first quarter of 2015, Providence had 28,243 people enrolled in its individual plans. That number has climbed steadily for a year and a half, to 107,575 as of Sept. 30.

Moda’s growth as a provider of individual health insurance, however, peaked months ago and has dropped substantially over the past year and a half: from 136,086 people covered by individual plans as of March 31, 2015, to 65,906 today.

Who covered the most people through individual health insurance plans, as of Sept. 30?

  1. Providence Health Plan: 107,575 people.
  2. Moda Health Plan: 65,906 people.
  3. Kaiser Permanente: 39,470 people.
  4. Regence BlueCross BlueShield: 19,364 people.
  5. LifeWise Health Plan of Oregon: 16,174 people.
  6. BridgeSpan: 14,600 people.
  7. PacificSource Health Plans: 13,966 people.
  8. Zoom Health Plan: 1,611 people.
  9. Health Net Health Plan of Oregon: 818 people.

Traditional group insurance plans

Traditional group health insurance plans have been waning for years, as large employers like Nike and Intel shift to paying companies to administer self-insured plans. Still, for smaller companies group health is still the primary way to provide coverage to employees.

Who covered the most people through comprehensive group health insurance plans?

  1. Kaiser Permenente: 351,273 people.
  2. Providence Health Plan: 161,007 people.
  3. Regence BlueCross BlueShield: 128,645 people.
  4. PacificSource Health Plan: 101,582 people.
  5. Moda Health Plan: 50,418 people.
  6. Health Net Health Plan of Oregon: 50,042 people.
  7. LifeWise Health Plan of Oregon: 14,318 people.
  8. Zoom Health Plan: 1,223 people.
  9. BridgeSpan: No group plans.

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

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