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Health plans bleeding too

Minnesota State Roundup

July 1, 2008

Health plans bleeding too

Many people claim that health care costs an arm and a leg. Even if that's the case, the state's nonprofit health plans apparently aren't hoarding them.

Last year, the state's eight largest nonprofit health plans, which provide health care coverage to more than 4 million people, showed operating losses of $71 million, according to the Minnesota Council of Health Plans, a trade group. This was the third consecutive year of operating losses, and this year's results were actually a small improvement.

The reasons for the financial trouble should sound familiar. Health plans have had difficulty keeping up with medical cost inflation; in 2007, medical care costs paid for by the eight organizations went up 7 percent, to more than $14 billion. The industry's balance sheet looks better, however. Health plans managed to cover their operating losses, thanks to more than $200 million in investment income.

Ronald A. Wirtz