HMOs’ piggy banks get bigger

16 Jul

Minnesota’s HMOs continue to bank huge surpluses.  According to health care analyst Allan Baumgarten’s report, which was cited here by the Twin Cities Business Journal, health plans in the state collectively socked away $241 million in 2012.  That’s up from 2011 profits of $230 million.

HMOs surpluses

HMOs living high on the hog with huge surpluses

HMOs will disagree with the word profits, as they’re non-profits, but their revenues combined mean they’re now sitting on $1.9 billion in savings.  State law require them to save money to remain solvent, but the latest figures show the state’s health plans are now banking $1.3 billion more than regulations require.

HealthPartners alone generated nearly $128 million in operating income over the past two years, which earns it the title of most profitable HMO in the state.  That means employers and their employees are grossly overpaying HMOs for medical coverage.   A bill, however, that would require HMOs to only maintain a net worth limited to just 25 percent of their expenses never saw the light of day in the legislature last year.

The TCBiz Journal reports the HMOs have also applied to sell coverage on the MNSure Exchange next fall, and Baumgarten expects these insurers will be offering limited range of provider coverage on the network to keep costs down and profits up.

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