Research and Markets: Minnesota Health Market Review 2011

DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/2456ce/minnesota_health_m) has announced the addition of the "Minnesota Health Market Review 2011" report to their offering.

Minnesota HMOs and health insurers had their most profitable year ever in 2010, with strong margins on Medicaid as well as employer group business. Enrollment grew for the second consecutive year.

These and other important market developments are analyzed in Part One of "Minnesota Health Market Review 2011". The report is Allan Baumgarten's 22nd annual report analyzing the Minnesota health care market. He is an independent analyst and consultant based in Minnesota who has also prepared annual reports analyzing health care markets in 11 other states: Arizona, California, Colorado, Florida, Illinois, Kentucky, Michigan, New York, Ohio, Texas and Wisconsin. Part Two of the Minnesota report, to be released later this year, will include an analysis of profitability and care utilization for hospitals in the state and updated information on HMOs.

Among the Findings in the New Report:

• Minnesota HMOs posted record profits in 2010. HMOs and county Medicaid plans had net income of $264 million, or 3.6% of operating revenues of $7.3 billion. They had net income from operations of $194.3 million plus investment income of $69.8 million. In the past 15 years, Minnesota HMOs posted a 3% margin only once. In addition, the separate health insurance companies also had strong results. Blue Cross Blue Shield of Minnesota had net income after taxes of $100.1 million and Medica Insurance Company had net income of $44.1 million.
• Health plans increased their profits on state government plans, especially Medicaid. In 2010, state public programs (Medical Assistance and MinnesotaCare are the largest) accounted for about 46% of revenues but 78% of health plan profits. Minnesota health plans improved their net income on Medicaid plans (not including investment income) from $119.5 million in 2009 to $170 million in 2010. On average HMOs collected $77 more in premiums from the state per member per month than they paid out in medical expenses. Losses on MinnesotaCare offset part of that profit.
• Enrollment in HMOs and county plans increased by 1.9% in 2010. Although enrollment in employer group plans continues to decrease and has now fallen below 300,000, that drop was more than offset by growth in Medicaid and Medicare plans.
• Health premiums continue to grow faster than medical claims, general inflation and the overall economy. The average premium revenues that HMOs collected from their employer customers increased by 7.6% in 2010, from $377 to $406 per member per month. That compares to increases of 9.5% in 2009 and 8.6% in 2008. In four years, the average premium per member per month has increased by $115. In 2010, average monthly medical expenses increased by 4.0%. The spread between premiums and medical expenses for employer plans increased from $44 to $59 per member per month and operating gains increased from $15.2 million to $53.5 million.
• On average, HMOs maintain surpluses that are almost three times the required minimum. At the end of 2010, Minnesota HMOs had combined capital of $1.642 billion, much higher than the amount required under state law. On average, they had capital equal to nearly three months of operation, meaning they could continue to pay claims and overhead for about 90 days even if no revenues were coming in. That is up from 2.4 months in 2009.

For more information visit http://www.researchandmarkets.com/research/2456ce/minnesota_health_m