The state’s three biggest insurers reported operating losses on Monday, with Blue Cross, Harvard Pilgrim and Tufts Health Plan blaming the Affordable Care Act and the cost of prescription drugs as reasons for a combined total of $201 million in losses for the first six months of 2016.
Blue Cross Blue Shield of Massachusetts, the state’s largest insurer with 2.8 million members, reported an operating loss of $98.3 million in the six months ending June 30. That’s down about 20 percent from the $124.9 million operating loss in the first half of last year.
“Our results are driven by several factors including the cost of complying with the ACA, competitive pressures on premiums, our continued investment in new tools and services for our customers, and the continued rising costs of specialty medications,” said Allen Maltz, chief financial officer at Blue Cross.
Blue Cross said taxes and fees associated with the Affordable Care Act, were $7.1 million in the latest quarter, on top of $81 million for the first quarter.
Tufts Health Plan said it recorded $65.5 million in operating losses in the six month period, more than double the $29.9 million in the same six months in 2015. Tufts, which has over 1 million members, said MassHealth patients and commercially-insured members used more outpatient services, and subsequently cost more, than expected. The insurer said in a release it was looking into ways to curb that use.
Harvard Pilgrim Health Care, which has 1.3 million members, reported $37.3 million in operating losses, compared to a $29.8 million for the six months ending June 30.
“We remain concerned about the impact that rising medical and pharmaceutical costs as well as the unpredictability of programs will have on our financials over the remainder of the year,” said Chief Financial Officer Charley Goheen, in a release.
Harvard Pilgrim received $3.7 million under a program of the Affordable Care Act known as “risk adjustment”, which requires insurers with healthy members to give money to insurers with sick members. Yet many have criticized the program as being volatile. Last year, Harvard Pilgrim paid $3.6 million into the program.
The state’s three biggest insurers reported operating losses on Monday, with Blue Cross, Harvard Pilgrim and Tufts Health Plan blaming the Affordable Care Act and the cost of prescription drugs as reasons for a combined total of $201 million in losses for the first six months of 2016.
Blue Cross Blue Shield of Massachusetts, the state’s largest insurer with 2.8 million members, reported an operating loss of $98.3 million in the six months ending June 30. That’s down about 20 percent from the $124.9 million operating loss in the first half of last year.
“Our results are driven by several factors including the cost of complying with the ACA, competitive pressures on premiums, our continued investment in new tools and services for our customers, and the continued rising costs of specialty medications,” said Allen Maltz, chief financial officer at Blue Cross.
Blue Cross said taxes and fees associated with the Affordable Care Act, were $7.1 million in the latest quarter, on top of $81 million for the first quarter.
Tufts Health Plan said it recorded $65.5 million in operating losses in the six month period, more than double the $29.9 million in the same six months in 2015. Tufts, which has over 1 million members, said MassHealth patients and commercially-insured members used more outpatient services, and subsequently cost more, than expected. The insurer said in a release it was looking into ways to curb that use.
Harvard Pilgrim Health Care, which has 1.3 million members, reported $37.3 million in operating losses, compared to a $29.8 million for the six months ending June 30.
“We remain concerned about the impact that rising medical and pharmaceutical costs as well as the unpredictability of programs will have on our financials over the remainder of the year,” said Chief Financial Officer Charley Goheen, in a release.
Harvard Pilgrim received $3.7 million under a program of the Affordable Care Act known as “risk adjustment”, which requires insurers with healthy members to give money to insurers with sick members. Yet many have criticized the program as being volatile. Last year, Harvard Pilgrim paid $3.6 million into the program.
Date: August 16, 2016