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
"We're focused on how to get some of the attributes that you would expect from an Amazon, Azure, Google, and doing that on-prem. We believe today that you can actually get those types of things done with certain architectures available in the market today," explained Steve Conner, VP of Sales at Cloudistics, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Sanjeev Sharma Joins November 11-13, 2018 @DevOpsSummit at @CloudEXPO New York Faculty. Sanjeev Sharma is an internationally known DevOps and Cloud Transformation thought leader, technology executive, and author. Sanjeev's industry experience includes tenures as CTO, Technical Sales leader, and Cloud Architect leader. As an IBM Distinguished Engineer, Sanjeev is recognized at the highest levels of IBM's core of technical leaders.
As Cybric's Chief Technology Officer, Mike D. Kail is responsible for the strategic vision and technical direction of the platform. Prior to founding Cybric, Mike was Yahoo's CIO and SVP of Infrastructure, where he led the IT and Data Center functions for the company. He has more than 24 years of IT Operations experience with a focus on highly-scalable architectures.
JETRO showcased Japan Digital Transformation Pavilion at SYS-CON's 21st International Cloud Expo® at the Santa Clara Convention Center in Santa Clara, CA. The Japan External Trade Organization (JETRO) is a non-profit organization that provides business support services to companies expanding to Japan. With the support of JETRO's dedicated staff, clients can incorporate their business; receive visa, immigration, and HR support; find dedicated office space; identify local government subsidies; get...
All organizations that did not originate this moment have a pre-existing culture as well as legacy technology and processes that can be more or less amenable to DevOps implementation. That organizational culture is influenced by the personalities and management styles of Executive Management, the wider culture in which the organization is situated, and the personalities of key team members at all levels of the organization. This culture and entrenched interests usually throw a wrench in the work...
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.
Bill Schmarzo, author of "Big Data: Understanding How Data Powers Big Business" and "Big Data MBA: Driving Business Strategies with Data Science," is responsible for setting the strategy and defining the Big Data service offerings and capabilities for EMC Global Services Big Data Practice. As the CTO for the Big Data Practice, he is responsible for working with organizations to help them identify where and how to start their big data journeys. He's written several white papers, is an avid blogge...
DXWorldEXPO LLC announced today that Dez Blanchfield joined the faculty of CloudEXPO's "10-Year Anniversary Event" which will take place on November 11-13, 2018 in New York City. Dez is a strategic leader in business and digital transformation with 25 years of experience in the IT and telecommunications industries developing strategies and implementing business initiatives. He has a breadth of expertise spanning technologies such as cloud computing, big data and analytics, cognitive computing, m...
22nd International Cloud Expo, taking place June 5-7, 2018, at the Javits Center in New York City, NY, and co-located with the 1st DXWorld Expo will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud ...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory?
In past @ThingsExpo presentations, Joseph di Paolantonio has explored how various Internet of Things (IoT) and data management and analytics (DMA) solution spaces will come together as sensor analytics ecosystems. This year, in his session at @ThingsExpo, Joseph di Paolantonio from DataArchon, added the numerous Transportation areas, from autonomous vehicles to “Uber for containers.” While IoT data in any one area of Transportation will have a huge impact in that area, combining sensor analytic...
Bill Schmarzo, author of "Big Data: Understanding How Data Powers Big Business" and "Big Data MBA: Driving Business Strategies with Data Science," is responsible for setting the strategy and defining the Big Data service offerings and capabilities for EMC Global Services Big Data Practice. As the CTO for the Big Data Practice, he is responsible for working with organizations to help them identify where and how to start their big data journeys. He's written several white papers, is an avid blogge...
Charles Araujo is an industry analyst, internationally recognized authority on the Digital Enterprise and author of The Quantum Age of IT: Why Everything You Know About IT is About to Change. As Principal Analyst with Intellyx, he writes, speaks and advises organizations on how to navigate through this time of disruption. He is also the founder of The Institute for Digital Transformation and a sought after keynote speaker. He has been a regular contributor to both InformationWeek and CIO Insight...
Michael Maximilien, better known as max or Dr. Max, is a computer scientist with IBM. At IBM Research Triangle Park, he was a principal engineer for the worldwide industry point-of-sale standard: JavaPOS. At IBM Research, some highlights include pioneering research on semantic Web services, mashups, and cloud computing, and platform-as-a-service. He joined the IBM Cloud Labs in 2014 and works closely with Pivotal Inc., to help make the Cloud Found the best PaaS.
It is of utmost importance for the future success of WebRTC to ensure that interoperability is operational between web browsers and any WebRTC-compliant client. To be guaranteed as operational and effective, interoperability must be tested extensively by establishing WebRTC data and media connections between different web browsers running on different devices and operating systems. In his session at WebRTC Summit at @ThingsExpo, Dr. Alex Gouaillard, CEO and Founder of CoSMo Software, presented ...