Minnesota's nonprofit health plans saw their financial performance rebound in 2017, driven in part by a surprisingly large profit margin in the market where individuals buy coverage.
Margins in the individual market were so high that one health insurer could be providing $30 million in consumer rebates, while an official with another health plan hinted that flat or discounted premiums could be on the horizon.
For the past several years, the individual market has been a source of red ink for insurers across the country under the federal Affordable Care Act (ACA). The financial losses in Minnesota have been so large that lawmakers this year are spending $271 million to shore up the market.
"Medical costs for people who buy insurance on their own went down per-person," said Jim Schowalter, the chief executive of the Minnesota Council of Health Plans, the trade group that issued the report. "That is unexpected and obviously contributed significantly to the improvement from last year."
Overall, seven nonprofit health insurers posted combined net income of $307.9 million on $27.6 billion in revenue last year, according to the trade group's report released Tuesday.
Overall results include revenue and income from selling coverage for employer groups, Medicare beneficiaries, people in state public programs and those with individual coverage. The numbers were a turnaround from a collective loss of nearly $600 million in 2016, driven in part by individual market losses.
The individual market is an option for people primarily under age 65 who are self-employed or don't get coverage from their employer. The market has undergone sweeping change since 2014 with the ACA, which stopped health insurers from denying coverage to individuals based on pre-existing conditions.
For 2017, insurers in Minnesota's individual market saw income of $157 million on $976 million in revenue, for a 16 percent profit margin. That's a turnaround from 2016, when the carriers lost $222.7 million on $1.1 billion in revenue on policies purchased by individuals.