HMO Enrollments Show Dip In 2007
LANSING — Enrollments in two Grand Rapids-based health maintenance organizations has continued to erode in 2007, according to public financial statements filed this month with the Michigan Office of Financial and Insurance Services.
Priority Health’s HMO, which reported figures for the first time since its acquisition of the Detroit-area Care Choices from Trinity Health, counted 405,636 members statewide in the second quarter, compared to 413,773 in the first quarter. It was a 7-percent drop from 436,357 members reported for the end of 2006. Previous year figures were adjusted to account for the acquisition. Excluded are a number of other Priority Health plans, such as consumer-driven options and its Medicaid business.
Alone, Priority Health reported 344,469 members at the end of 2006, compared to 372,107 at the end of 2005. Care Choices reported 87,361 members at the end of the first quarter of 2007, when the acquisition took effect.
Most of the drop came from a 7.3 percent slip in group membership since Jan. 1, according to the adjusted figures. However, Priority Health saw a nearly 20-percent bounce in Medicare Advantage business, from 5,486 members at the end of 2006 to 6,566 at the end of 2007’s second quarter.
At Grand Valley Health Plan, the only HMO in Michigan with its own medical staff, enrollment dropped from 11,698 at the end of 2006 to 10,215 at the close of 2007’s second quarter, a loss of 12.7 percent. Group enrollment slipped more than 14 percent since the start of 2007, mitigated by less dramatic change in individual and federal employee membership.
Blue Care Network, the HMO of the state’s largest insurer, Blue Cross Blue Shield of Michigan, saw statewide enrollment move from 482,998 at the end of 2006 to 498,212 in the second quarter of 2007. While group membership saw modest growth, BCN’s biggest gain was in Medicare Advantage, where membership nearly doubled, from 5,054 at the end of 2006 to 10,051 in the second quarter.
Overall, Blue Cross Blue Shield counted 2.57 million members for the second quarter, in its filing with OFIS. Group enrollment has slipped about 2.5 percent for BCSCM since the start of 2007.
Gains came in BCBSM’s Medicare Advantage and individual arenas. Medicare Advantage enrollment was boosted to 52,074 in the second quarter, up 71 percent this year. Individual enrollment, buoyed by a marketing campaign, grew 13 percent from 124,071 at the end of 2006 to 140,483 in the second quarter.
Under Medicare Advantage, health coverage providers offer to those age 65 and older and to the disabled plans that encompass Medicare benefits and may include other options, such as prescription drug coverage and the elimination of the need for Medigap insurance. The products may be offered as HMOs, preferred provider organizations or private fee for service.
All the organizations are nonprofits, but each reported positive net income year-to-date, thanks largely to investment income. Priority Health HMO and Grand Valley Health Plan both recorded underwriting figures in the black, while Blue Care Network and BCBSM recorded losses in health coverage.
Priority Health reported net income of $15 million on total revenue of $692 million through the first half of 2007. Net underwriting gain was $6.3 million, while net investment gains came to $8.4 million. Net income in the first two quarters of 2006 was $9.1 million.
Grand Valley Health Plan reported net income of $334,023 on total revenue of $17 million, through the first half of 2007. Net underwriting gain was $134,000, while net investment gains were $367,238. Through the first two quarters of 2006, net loss was $67,216.
Blue Care Network claimed net income of $8.7 million on total revenue of $856 million through the first half of 2007. The net underwriting loss was $3.3 million, while net investment gains were $12 million. In the first half of 2006, net income was $14 million.
Blue Cross Blue Shield reported net income of $83.5 million on total revenue of $3 billion, through the first half of 2007. The net underwriting loss was $29.4 million, while net investment gains amounted to $109 million. Net income for the first half of 2006 was $110.7 million.
In its Medicaid line, Priority Health reported a net loss of $513,727 for the first two quarters of 2007, compared to a net loss of $2.9 million for the same period in 2006.