Welcome!

News Feed Item

MCHP member health plans spent nearly $20 billion on care in 2013

$120 million invested in ACA technology; operating margin below 1 percent

ST. PAUL, Minn., April 1, 2014 /PRNewswire-USNewswire/ -- Health plans in Minnesota paid $19.7 billion—$54.1 million every day—for medical care on behalf of their members for doctor visits, prescription drugs, hospital stays and other covered medical services in 2013. In all, spending for care was up nearly $1 billion or 4 percent over 2012. According to the Minnesota Council of Health Plans (MCHP), the change between 2012 and 2013 in medical care by category was:

  • Spending on care provided at home under the direction of a physician up 37.5 percent.
  • Spending on care for chemical dependency and mental health services provided in both inpatient and outpatient settings, excluding prescription medications and supplies, up 13 percent.
  • Spending on care for people who were hospitalized up 7.7 percent.
  • Spending on care provided at a skilled nursing facility up 5 percent.
  • Spending for care provided by chiropractors, therapists, social workers, nurse practitioners (health professionals other than physicians and dentists) up 3 percent.
  • Spending for care provided by hospitals in outpatient settings up 2 percent.
  • Spending for care provided in emergency centers up 1 percent.
  • Spending on durable medical goods such as wheelchairs, eyewear, hearing aids, oxygen, equipment rental, etc., down 4 percent.
  • Spending on prescription drugs and non-reusable medical supplies spending down 3.5 percent.
  • Spending for physician services, including costs for all services provided by or under the supervision of licensed medical doctors and doctors of osteopathy, down 1.6 percent.

Overall, medical care spending per person increased 2 percent over 2012.

In work related to the implementation of the federal Affordable Care Act (ACA), Minnesota's health plans invested nearly $120 million industrywide in technology systems to administer the numerous provisions associated with ACA implementation.

"This IT investment represents a sliver of the work that took place last year and will continue in 2014 as the ACA is implemented," said Julie Brunner, executive director of the Minnesota Council of Health Plans. "In addition to the overall ACA-related IT investments, Minnesota's health plans have contributed thousands of hours to MNsure to ensure Minnesotans have the coverage they selected."

Average industry operating margin below 1 percent

The uptick in spending on care brought the overall industry-wide operating margin to 0.67 percent ($146.5 million) on $21.9 billion of premium revenue. Investment income of $149.4 million made the 2013 contributions to reserves 1.3 percent ($286.8 million) of total revenue.

National and state standards exist to ensure that health plans have sufficient reserves for continuous payment of members' medical bills and for investing in technology and other improvements – even when there are unexpected catastrophic claims, natural disasters or market instability.

Revenue from state public programs serving 641,414 Minnesotans was $4.4 billion in 2013 and the health plans spent more than $11 million a day on care for enrollees. The year ended with an operating margin of 2.6 percent ($115.3 million.) The average operating margin over the past 10 years on public programs is 1.8 percent of revenue.

Year

Operating

Margin as % of premium revenue

2013

0.67%

2012

0.57%

2011

1.8%

2010

1.52%

2009

0.83%

2008

0.39%

2007

(0.45%)

2006

(0.59%)

2005

(0.59%)

Taxes on premiums up 24 percent; enrollment increases

Premium taxes paid by smaller employers and individual policyholders increased 24 percent to $323.8 million in 2013. The increase was driven by a $160 million assessment to help pay for care provided to enrollees of the Minnesota Comprehensive Health Association (MCHA). Smaller employers and individual policy holders make up for costs not covered by the premiums paid by MCHA members. This assessment was up 21 percent from the previous year.

Taxes and assessments account for about 12 percent of the premium paid by these policyholders. 

In all, enrollment in MCHP's seven member health plans topped 4.5 million, up 2 percent from 2012. Data reported also show the following for 2013:

  • Enrollment in coverage sponsored by large employers that self-fund their claims expenses increased nearly 3 percent to 2.3 million people.  
  • Enrollment in insurance company products remained steady at 1.5 million people and HMO product enrollment increased 2 percent to just more than 902,000 people. Group coverage for companies with 50 or fewer employees declined 1 percent to 344,599.  
  • Enrollment in Medicare products increased to 496,194, up 8 percent over 2012.
  • Enrollment in Special Needs BasicCare, coverage for people ages 18 through 64 who have a disability and qualify for Medicaid, increased from 18,000 in 2012 to 38,293 as the state moved from fee-for-service coverage to managed care. (Individuals had the choice to opt out of the move.)
  • More than 60,000 Minnesotans were enrolled in health care coverage under the federal expansion of Medicaid.
  • Overall, enrollment in all public programs combined (MinnesotaCare, Prepaid Medical Assistance Program, Special Needs BasicCare, Minnesota Senior Health Options and Minnesota Senior Care Plus) reached 653,008.

State statute requires Minnesota's health plans to submit reports on their financial status. The reports are independently audited to ensure they meet requirements of the Financial Accounting Standards Board, and definitions and standards promulgated by the National Association of Insurance Commissioners and the State of Minnesota. The Minnesota Council of Health Plans (MCHP) is the trade association for Minnesota's seven nonprofit health plan companies.
MCHP promotes the delivery of high-quality, affordable health care.

SOURCE Minnesota Council of Health Plans

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Identity is in everything and customers are looking to their providers to ensure the security of their identities, transactions and data. With the increased reliance on cloud-based services, service providers must build security and trust into their offerings, adding value to customers and improving the user experience. Making identity, security and privacy easy for customers provides a unique advantage over the competition.
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of So...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management solutions, helping companies worldwide activate their data to drive more value and business insight and to transform moder...
SYS-CON Events announced today that eCube Systems, a leading provider of middleware modernization, integration, and management solutions, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. eCube Systems offers a family of middleware evolution products and services that maximize return on technology investment by leveraging existing technical equity to meet evolving business needs. ...
SYS-CON Events has announced today that Roger Strukhoff has been named conference chair of Cloud Expo and @ThingsExpo 2016 Silicon Valley. The 19th Cloud Expo and 6th @ThingsExpo will take place on November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. "The Internet of Things brings trillions of dollars of opportunity to developers and enterprise IT, no matter how you measure it," stated Roger Strukhoff. "More importantly, it leverages the power of devices and the Interne...
Personalization has long been the holy grail of marketing. Simply stated, communicate the most relevant offer to the right person and you will increase sales. To achieve this, you must understand the individual. Consequently, digital marketers developed many ways to gather and leverage customer information to deliver targeted experiences. In his session at @ThingsExpo, Lou Casal, Founder and Principal Consultant at Practicala, discussed how the Internet of Things (IoT) has accelerated our abil...
Digital innovation is the next big wave of business transformation based on digital technologies of which IoT and Big Data are key components, For example: Business boundary innovation is a challenge to excavate third-party business value using IoT and BigData, like Nest Business structure innovation may propose re-building business structure from scratch, as Uber does in the taxicab industry The social model innovation is also a big challenge to the new social architecture with the design fr...
Whether they’re located in a public, private, or hybrid cloud environment, cloud technologies are constantly evolving. While the innovation is exciting, the end mission of delivering business value and rapidly producing incremental product features is paramount. In his session at @DevOpsSummit at 19th Cloud Expo, Kiran Chitturi, CTO Architect at Sungard AS, will discuss DevOps culture, its evolution of frameworks and technologies, and how it is achieving maturity. He will also cover various st...
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, provided tips on how to be successful in large scale machine learning...
If you had a chance to enter on the ground level of the largest e-commerce market in the world – would you? China is the world’s most populated country with the second largest economy and the world’s fastest growing market. It is estimated that by 2018 the Chinese market will be reaching over $30 billion in gaming revenue alone. Admittedly for a foreign company, doing business in China can be challenging. Often changing laws, administrative regulations and the often inscrutable Chinese Interne...
Why do your mobile transformations need to happen today? Mobile is the strategy that enterprise transformation centers on to drive customer engagement. In his general session at @ThingsExpo, Roger Woods, Director, Mobile Product & Strategy – Adobe Marketing Cloud, covered key IoT and mobile trends that are forcing mobile transformation, key components of a solid mobile strategy and explored how brands are effectively driving mobile change throughout the enterprise.
Creating replica copies to tolerate a certain number of failures is easy, but very expensive at cloud-scale. Conventional RAID has lower overhead, but it is limited in the number of failures it can tolerate. And the management is like herding cats (overseeing capacity, rebuilds, migrations, and degraded performance). Download Slide Deck: ▸ Here In his general session at 18th Cloud Expo, Scott Cleland, Senior Director of Product Marketing for the HGST Cloud Infrastructure Business Unit, discusse...
In his session at @ThingsExpo, Kausik Sridharabalan, founder and CTO of Pulzze Systems, Inc., will focus on key challenges in building an Internet of Things solution infrastructure. He will shed light on efficient ways of defining interactions within IoT solutions, leading to cost and time reduction. He will also introduce ways to handle data and how one can develop IoT solutions that are lean, flexible and configurable, thus making IoT infrastructure agile and scalable.
Data is an unusual currency; it is not restricted by the same transactional limitations as money or people. In fact, the more that you leverage your data across multiple business use cases, the more valuable it becomes to the organization. And the same can be said about the organization’s analytics. In his session at 19th Cloud Expo, Bill Schmarzo, CTO for the Big Data Practice at EMC, will introduce a methodology for capturing, enriching and sharing data (and analytics) across the organizati...
Internet of @ThingsExpo has announced today that Chris Matthieu has been named tech chair of Internet of @ThingsExpo 2016 Silicon Valley. The 6thInternet of @ThingsExpo will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.