The elective medical treatments postponed by Oregonians during the COVID-19 pandemic have helped the insurance industry’s bottom line.
Oregon’s three largest insurers by enrollment – Kaiser Foundation Health Plan of the Northwest, Regence BlueCross BlueShield of Oregon and PacificSource Health Plans – posted huge profits through the first six months of the year, according to financial filings collected by the National Association of Insurance Commissioners.
Most of those profits came during the second quarter of the year, covering April to June. And they were eye-popping for Kaiser and Regence.
Kaiser, by far the largest commercial insurer in the state, recorded $188 million in profits through the end of the second quarter, up from $85 million during the same period last year.
Profits at PacificSource tripled, up to $37 million from $12.5 million last year.
Regence, the second-largest insurer, recorded a more modest but still impressive profit of $65 million, up from $57 million last year.
Profits for each were out of scale with the modest 5% to 8% patient revenue growth they recorded over that time. The insurers benefitted instead by paying out tens of millions of dollars less in reimbursements for patient claims and pocketing a greater share of policyholders’ monthly premium payments, their filings show.
With Gov. Kate Brown’s ban on nonelective procedures from mid-March to May 1 and a reluctance among Oregonians to proceed with many medical procedures after over fears of contracting the coronavirus in a hospital, many of the costly claims insurers typically pay out haven’t materialized this year.
The net value of claims dropped by nearly $41 million for Kaiser in the first six months of the year compared with the same period in 2019, and $27 million for Regence, their filings show.
Regence announced last week that it will return $11.1 million to policyholders in Oregon who paid monthly premiums but couldn’t access medical treatment while the nonelective procedure ban was in place. Those refunds will come in the form of credits applied to future premium payments.
Hospitals have borne the biggest financial brunt of the pandemic, being forced to cancel elective procedures while investing in costly upgrades to increase patient safety. The American Hospital Association in May forecast monthly losses of nearly $51 billion for the nation’s hospital system due to the pandemic.
But five of Oregon’s seven largest insurers are enjoying better financial performances this year than last.
After Kaiser, Regence and PacificSource, gains are far more muted, however.
Portland-based Moda Health Plan posted a $4.8 million loss through the first six months of the year, an improvement from its $7 million loss in the first half of 2019, its filings show.
Health Net Health Plan of Oregon posted a $168,000 profit, after a $5 million loss last year.
Just two insurers, Providence Health Plan and BridgeSpan Health Co, posted worse income figures through the first half of this year than last.
Profits at Providence plunged from $26 million last year to under $1 million this year. The insurer has cut pay and furloughed workers to try to plug financial holes it said were caused by the pandemic.
Moda also furloughed dozens of workers in May, blaming a drop in claims as fewer patients visited hospitals and health clinics.
BridgeSpan posted a $1.3 million loss this year, after recording a $2 million profit through June of last year.
As the pandemic’s economic impact forces more Oregonians off private insurance and on to the Oregon Health Plan for Medicaid coverage, the most profitable insurers appear to be the ones growing their enrollment pools, or keeping declines minimal.
Enrollment in Regence plans is up 4.4% compared to last year. PacificSource enrollment is up 2%, while Kaiser’s is down by just 0.2%.
By contrast, enrollment in Moda plans is down by 18%, while enrollment in Providence plans is down nearly 14%.
You can reach Elon Glucklich at [email protected].
