Blues' HMOs: Shrinking, but profitable
■ An occasional snapshot of current facts and trends in medicine.
Quick View. Posted Nov. 15, 2004
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.