Regence Posts Strongest Profits of Oregon’s Top Insurers

Meanwhile, Kaiser Permanente reports a financial loss and declining member rolls in the first quarter of 2013

May 23, 2013 -- Regence BlueCross BlueShield of Oregon bolstered its position as the largest health insurance company in the state during the first three months of 2013. At the same, it also time delivered the strongest profits among large Oregon insurers.

Regence BCBS total membership climbed by 18,800 lives during the first quarter of the year, to 491,702, and the insurer posted a $16.09 million profit, according to financial reports made available in the past week by the National Association of Insurance Commissioners.

Among the private-sector insurers, only Kaiser Permanente came close to Regence’s size in Oregon, but Kaiser started 2013 with shrinking membership and financial losses. Kaiser enrollment fell by 1,585 to 466,222 in the first three months of the year, while the health plan reported a $1.56 million net loss.

Regence and Kaiser each have more than twice the members of the next largest insurance company in Oregon, PacificSource, which saw its membership ranks shrink in the first quarter after growing steadily throughout 2012.

PacificSource had seemed to be willing to accept financial losses in return for membership growth. In 2012, it reported net loss of $25.9 million – about $60 per person covered – while growing enrollment by 10.2 percent, or more than 20,000 people. But that changed in early 2013, when PacificSource boosted profits while shrinking enrollment. The company finished its first quarter with 210,881 members, down by 13,606, but managed to post a $10.6 million profit.

As of March 31, here’s how Oregon’s seven largest health insurers ranked:

1. Regence BlueCross BlueShield of Oregon, 491,702 members, up 7.4 percent from a year earlier.

2. Kaiser Permanente, 466,222 members, down 1.9 percent.

3. PacificSource Health Plans, 210,881 members, down 2.5 percent

4. Providence Health Plan, 188,353 members, up 2 percent.

5. Moda Health Plan (previously ODS), 79,492 members, up 18.7 percent

6. Health Net Health Plan of Oregon, 68,216 members, down 24.6 percent.

7. LifeWise Health Plan of Oregon, 51,645 members, down 2.7 percent.

These rankings draw on an incomplete view of Oregon’s insurance industry. Health insurers must disclose information about traditionally underwritten insurance plans. Many large employers are self-insured, including the state of Oregon – which covers more than 100,000 employees and their dependents – and also big businesses like Nike, Intel and Oregon Health & Science University. Details of those plans are not open to public scrutiny. Nonetheless, insurers’ financial reports do provide a broad view of the industry.

Among the details revealed by Oregon’s seven largest insurers in their filings:

  • Kaiser spent 97 cents on medical care for every $1 it collected in premiums, a greater portion than any other insurer. Providence ranked No. 2, spending 89 cents on care for every $1 in premiums. Health Net ranked last, spending 82 cents on care per $1 in premiums.

  • Profit margins continue to be razor thin, averaging 2.1 percent. Health Net, LifeWise and Kaiser posted losses, which were small relative to each company’s size. PacificSource’s 5.8 percent profit margin was the widest margin of the bunch, and that came after a year of financial losses.

  • The overall pool of people covered through these companies’ insurance plans appears to be fairly stable in size – roughly 1.4 to 1.5 million – suggesting that insurers may be wooing business away from one another rather than growing by finding new uninsured people to cover.

  • Every insurer is financially sound, with each continuing to far exceed state requirements for capital reserves.

To view key financial metrics from Oregon’s seven largest insurance companies, click here.

Starting next year, once Oregon’s health insurance exchange, Cover Oregon, gets under way, the enrollment and profit margins in the individual and small group marketplace could substantially change, while the actual rates charged by health insurers will not be determined until July 1, after the Insurance Division holds public rate hearings. Enrollment in the exchange gets under way on October 1, with coverage starting on January 1.

Courtney Sherwood can be reached at [email protected].

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I am a bit confused on two points raised in this article. The article says that Regence Blue Cross Blue Shield of Oregon made the highest "profits" of private health insurers in our state, yet Blue Cross Blue Shield of Oregon is a private non-profit company. If that is the case, the "profit" from revenue left over after expenses would not be paid out to investors, but would have to go back into the system to provide services, would it not? It could also be a reason to lower premium coasts or increase payments to providers, but there are no "investors" to pay "profits" to. So what is going on with Blue Cross? Another question the story triggered was why is the information about state run public employees health benefits plan not public information? Is it exempt under Oregon Public Records law (ORS 192)?