Investment income mitigated health plan losses to a degree last year, a new report shows, but couldn't compensate for all the red ink insurers saw from the business of selling coverage.
Minnesota's nonprofit HMOs and health insurers collectively earned about $149 million from investments in 2016, Allan Baumgarten, an independent health care analyst in St. Louis Park, said in a report being released Friday.
The gains couldn't offset collective losses, however, on state public health insurance programs and the troubled market where individuals buy coverage.
After factoring investment gains and operating losses, HMOs and health insurance companies posted a combined net loss of about $512 million for the year, according to Baumgarten's annual report on the finances of Minnesota health plans.
"I think it's largely a one-year blip," he said, noting that two insurers with big losses last year have taken steps to reduce the red ink.
Jim Schowalter, chief executive of the Minnesota Council of Health Plans, a trade group for insurers, said the losses might endure because broader problems haven't necessarily been fixed in either of the markets where carriers saw losses last year. In April, the trade group said operating losses for health plans made 2016 the worst financial year in a decade for the industry.
"Nothing about the losses in 2016 was one-time," Schowalter said in a statement.
Minnesota is one of many states that has seen troubles in the individual market, which serves self-employed people and those who don't get coverage from an employer or the government. The federal Affordable Care Act has brought sweeping changes to the individual market, with health plans struggling to make the business profitable as a result.
