Blues' HMOs: Shrinking, but profitable
Quick View. Nov. 15, 2004.
| All Blues-owned HMOs |
2000 |
2003 |
Change |
| Net income |
$189.6 million |
$1.15 billion |
507% |
| Underwriting gain (loss) |
($92.4 million) |
$1.2 billion |
1,390% |
| Membership |
12.4 million |
10.5 million |
-15.3% |
Between 2000 and 2003, HMO plans belonging to BlueCross BlueShield Assn. companies have declined significantly in membership, but net income has shot up about 500% as a group.
Among the reasons behind the increase in HMOs' net income over the three years was a moderation in the rise of health care costs in 2003, compared with what was anticipated, as well as insurance rate increases put into place by payers, said Sally Rosen, a senior financial analyst for A.M. Best Co. The largest Blues HMO in 2003 was Keystone Health Plan East, an HMO of Philadelphia-based Independence Blue Cross, with nearly 1.2 million members. The plan with the highest profits was Health Options Inc., owned by BlueCross BlueShield of Florida, with net income of $137.2 million.
Note: Underwriting gain or loss is the difference between what the HMO collects in premiums and what it pays in health care and administrative expenses.
Source: A.M. Best Co.
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Copyright 2004 American Medical Association. All rights reserved.
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