Minnesota health insurers see earnings boost from Affordable Care Act
By Christopher Snowbeck / Minneapolis Star Tribune Major changes with the federal Affordable Care Act boosted earnings for Minnesota's nonprofit health insurers in 2014. The health plans collectively posted operating income last year of about $22...
By Christopher Snowbeck / Minneapolis Star Tribune
Major changes with the federal Affordable Care Act boosted earnings for Minnesota's nonprofit health insurers in 2014.
The health plans collectively posted operating income last year of about $229.4 million on $23.7 billion in revenue, for an operating margin of just under 1 percent, according to figures released Wednesday. It was the most profitable year for insurers since 2011, according to data from the Minnesota Council of Health Plans, the trade group for the state's seven major nonprofit insurers.
The federal health law in 2014 expanded access to public health insurance coverage, and provided subsidies for individuals to purchase non-group policies.
Those changes were the key drivers behind a nearly 7 percent increase in overall enrollment for the insurers between 2013 and 2014. The tally for people with coverage through the plans grew by 308,895, to more than 4.8 million people.
Expanded coverage in the individual market did not help the bottom line of insurance companies overall, the trade group said, as the health plans collectively posted about $316 million in individual market losses. A large chunk of the losses came from Golden Valley-based PreferredOne, which offered rock-bottom premiums and saw dramatic expansion of its non-group business in 2014.
"Individual market losses of $316 million creates volatility that will take a few years to address," said Jim Schowalter, the president and chief executive for the Minnesota Council of Health Plans, in a statement.
The insurers have contracts with the state to manage care for many in the Medicaid and MinnesotaCare program. Nearly 150,000 more people were covered through the public programs last year, and the line of business generated collective earnings of $185.2 million for health plans.
The trade group's numbers cover financial performance for the biggest names in health insurance in Minnesota including Eagan-based Blue Cross and Blue Shield of Minnesota, Bloomington-based HealthPartners, Minnetonka-based Medica, PreferredOne and Minneapolis-based UCare.