Nonprofit insurers in Minnesota reported an operating loss of $687 million on nearly $25.9 billion in revenue for 2016, according to a trade group for insurers, the Minnesota Council of Health Plans. The financial results were the worst in a decade, with losses in both the state public health insurance programs and the marketplace where individuals purchase coverage for themselves.
Overall, revenue from premiums increased 4 percent over the prior year, while expenses increased 6 percent to $26.6 billion. State public programs accounted for more than half of the overall losses, followed by continued losses in the individual market. According to the report, on average, health insurers paid $763 per second for care. To pay those bills, insurers withdrew nearly $560 million from state-mandated medical reserves. The bulk of the financial losses reported did not result from the employer group and Medicare markets, which remained steady, and where most Minnesotans get health insurance.
In the individual market, Blue Cross and Blue Shield of Minnesota said it lost $142 million for 2016, compared to a $265 million deficit the previous year. The decline mirrored the drop in enrollment, the insurer noted, rather than an improvement in the business. Over the last 10 years, health insurers returned a profit in seven. The numbers reported by the trade group focused solely on revenue and income from the health insurance business, as investment returns made by insurers were not counted in the numbers. Some saw hope in the overall numbers, however, noting that the market was not in a “death spiral,” as some health law critics have argued, because many insurers in 2016 saw slight improvements from the previous year.