Original Publish Date: December 4, 2014
California health plans recently filed financial reports for the first nine months of 2014 and fourty-three of the sixty-five plans were profitable. This compares unfavorably to the first nine months of 2013 when fifty plans were profitable.
Twelve plans began operations in either 2013 or 2014 and four of these new plans broke even or reported a profit.
Kaiser Foundation HP led all plans with a $3.141 billion profit.
Tangible Net Equity (TNE) for the plans was generally greater at the end of the third quarter 2014 than at the end of the third quarter 2013. TNE is defined by state statute and measures a plan’s solvency. It approximates net worth assuming intangible assets are removed and subordinated debt is added. TNE was higher for forty-four of the fifty-nine plans that were operational in the third quarter of 2013.
Our report, shown here, presents Revenues, Medical Costs, Administrative Expenses, Net Income and TNE for sixty-five health plans that reported data to the DMHC for the first nine months of 2014 and the first nine months of 2013.
All information in this report was obtained from publicly available data on the DMHC web site. However, the DMHC web site doesn’t always incorporate post-close adjustments or audit adjustments. Information not required to be filed with the DMHC (self-insured and parts of California insured business from non-domestic carriers) is not included in this report nor is it referenced in this article. We prepared this report so a user could quickly determine the financial health of the California health plan industry. Additional in-depth analysis is beyond the scope of this article.
The California health plan industry remains healthy with comparable financials between the two nine month periods. New plans, with their higher start-up costs and lower revenues, account for the lower relative level of profitability between the two periods.
Our next report will focus on calendar year end 2014 financials compared to calendar year end 2013.
David Peel is the Publisher of the California Healthcare News. He has served as the Chief Financial Officer of three west coast health insurance companies. He can be reached at 425-577-1334 or firstname.lastname@example.org.