Top insurers post quarterly gains
Blue Cross reports $75.8m net income
Globe Staff / November 16, 2010
Taking advantage of seasonal improvements in their business, the state’s four largest health insurance companies yesterday posted financial gains for the three months ended Sept. 30.
The stronger third-quarter results reflected, among other factors, less use of health care services during the summer and a boost in investment income as long-sluggish financial markets rebounded. Insurers also benefited in comparisons with the third quarter of 2009, when claims were up because of the swine flu epidemic.
Leading the pack was Blue Cross Blue Shield of Massachusetts, the state’s biggest health insurer, which reported net income of $75.8 million for July through September. That was more than quadruple the $17.1 million the Boston insurer earned in the same period last year.
Wellesley-based Harvard Pilgrim Health Care, the second-largest health insurer, posted third-quarter net income of $44.5 million, more than triple its $13.6 million from a year earlier.
Tufts Health Plan, based in Watertown, earned quarterly income of $59 million, nearly triple the $22.1 million it netted in the third quarter a year ago.
Fallon Community Health Plan, based in Worcester, reported net income of $6.9 million. That reversed its net loss of $13.4 million for the third quarter of 2009.
The results also marked an improvement from the second quarter of this year, when two health insurers posted losses and two others registered modest gains as the state Division of Insurance capped base-rate increases for small businesses and individuals. Three of the carriers ultimately settled with the state, voluntarily limiting rate increases in that market this year.
“We’ve been experiencing losses as a result of the rate cap through the first nine months of this year," said Allen P. Maltz, chief financial officer of Blue Cross Blue Shield, which, despite its strong third quarter, reported a year-to-date net loss of $3.7 million and an operating loss of $75.6 million. “But we’re also benefiting from the best investment market of the past decade."
At the same time, the use of hospital services is down and many patients have been postponing elective surgeries and other procedures, Maltz said.
That is a trend often seen in summer, though the economy might be an additional factor this year as more patients balk at paying higher out-of-pocket expenses.
Blue Cross Blue Shield was not the only insurer to lose money year to date. Fallon posted a net loss of $14.3 million for the first nine months of 2010.
Harvard Pilgrim reported net income of $24 million, and Tufts said it had net income of $19 million for the nine-month period.
Robert Weisman can be reached at weisman@globe.com.
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