ST. LOUIS PARK, Minn. – Health insurance companies in Minnesota took significant losses in 2016 according to a new report released Friday.
The report is from St. Louis Park-based independent health care analyst Allan Baumgarten. Baumgarten has released the Minnesota Health Market Review annually since 1990, as well as publishing similar reports for Colorado, Florida, Illinois, Michigan, Ohio, Texas, and Wisconsin.
The Star Tribune reports that Baumgarten’s most recent report shows that Minnesota’s HMOs and health insurance companies registered a total net loss of around $512 million in 2016. This is after factoring in the investment profits that companies made in the past year. Baumgarten’s report shows Minnesota-based companies made a profit of approximately $149 million in investments in 2016, reports the Star Tribune.
This is a slightly better sounding outlook for health insurance companies than the Minnesota Council of Health Plans, a trade group of insurers, announced in an April report. As Alpha News reported at the time, that report stated Minnesota health insurers experienced a total net operating loss of $687 million.
“While information throughout last year pointed to some financial problems, $687 million is a much bigger number than I expected,” Jim Schowalter, president of the Minnesota Council of Health Plans, said in a statement in April.
Baumgarten’s report examines eight HMOs and three County Health Insurance Agencies. Four of the HMOs are also licensed to do business as insurance companies, and those are also examined in their own right. Two HMOs are not headquartered in Minnesota, with Sanford Health Plan of Minnesota based in Sioux Falls, South Dakota, and Gundersen Lutheran Health Plan Minnesota based in LaCrosse, Wisconsin.
In spite of these losses, and losses in the previous year, Baumgarten’s report shows that over the last five years the 11 organizations he analyzed have a cumulative net income of $393 million, reports the Star Tribune.
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