• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

State's Largest Health Insurer Reports Robust Quarter

Posted on: Friday, 12 August 2005, 21:01 CDT

Aug. 13--Blue Cross and Blue Shield of Massachusetts Inc., the state's largest health insurer, yesterday reported a robust financial performance for the second quarter, and all three of the major insurance companies in the state posted significant gains over the same period last year.

Blue Cross and its HMO arm reported net income of $85.5 million and revenue of $1.4 billion. More than two-thirds of Blue Cross's income, $58.4 million, came from investments.

Blue Cross and HMO Blue "both experienced very positive financial quarters" during the period, chief financial officer Allen Maltz said in a statement. Net income for the combined organizations increased 75 percent from the second quarter of 2004, when they earned $48.7 million.

The Blue Cross groups added 49,000 members during the quarter, bringing enrollment to 2.8 million.

Harvard Pilgrim Health Care, which had 881,000 members at the middle of the year, reported second-quarter net income of $18.3 million on revenue of $551 million. About $13 million was operating income. The results represented a strong gain from the same period last year, when the plan earned net income of $3.2 million and operating income of $1.8 million.

The insurer's "improved financial performance is attributable to tightly managed medical, pharmacy, and administrative costs," Charles D. Baker, Harvard Pilgrim's president and chief executive, said in a statement. "We've seen especially strong new-business growth in New Hampshire and our national account membership has exceeded our expectations."

The positive financial reports could affect Blue Cross's and Harvard Pilgrim's rate negotiations with employers during fall open enrollment, according to Susan Connolly, healthcare benefits consultant at Mercer Human Resource Consulting in Boston.

Employers are "going to want to participate in the good results ... with lower rate increases that they can pass along to their employees," Connolly said.

Tufts Health Plan, the smallest and most financially challenged of the state's major insurers, said its net income of $6.2 million on revenues of $488 million met expectations. The plan earned $6.8 million on its investments, but lost $793,000 on health insurance operations. In the year-ago quarter, Tufts had net income of $1.4 million with investment income of $7.5 million covering an operating loss of $6.6 million.

"Getting from a $6 million operating loss to break-even was an improvement and right in line with where we want it to be," said Tufts finance chief Andy Hilber. "We have about $700 million in cash and investments and that provides a very steady, constant level of income for us that offsets some volatility on the operating side."

Tufts said it added 2,000 state-employee members to its Navigator plan, which ranks hospitals in three tiers and charges members different copays based on each institution's quality and value. Navigator is one of the new "consumer-driven" healthcare options designed to control costs by giving consumers incentives to choose lower-priced and higher-quality alternatives to traditional plans. Overall, Tufts lost 5,000 members in the quarter, leaving it with about 675,000 members.

-----

To see more of The Boston Globe, or to subscribe to the newspaper, go to http://www.boston.com/globe.

Copyright (c) 2005, The Boston Globe

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

Source: The Boston Globe

More News in this Category