BOSTON — The state's biggest health insurers collectively saw a surge in profits last year, amid a drop in claims from the pandemic, according to a new report.
Collectively, ten of the state's largest health plans reported $637 million in net income in the fiscal year that ended June 2020 -- a roughly 98% increase over the previous fiscal year, according to the report from the Massachusetts Health and Hospital Association.
"As providers paused elective procedures to ensure access for COVID-19 patients, and consumers stayed away from hospitals and physician practices, health plans experienced a significant reduction in claims payout," the report's authors wrote. "Most plans had the best financial results and the largest profit margins in many years because of reduced utilization and payments resulting from the coronavirus pandemic."
Health plans reporting profits last year included Blue Cross Blue Shield HMO Blue plan and Fallon Health, both of which reported a 4.6% margin. UnitedHealthcare reported a 3.4% profit margin while Harvard Pilgrim Health Care saw a 0.3% margin, according to the hospital association's report.
Health plan reserves rose to a record high of $5.6 billion in 2020, about 12.4% more than the previous fiscal year, noted the authors of the report, issued on behalf of a group of 70 hospitals in Massachusetts.
For most plans, enrollment in health plans remained "stable" from 2019 to 2020, according to the report, with some of the largest insurers seeing increases in membership. Only two plans -- HMO Blue and Tufts Public -- reported enrollment declines, according to the report.
Despite the report from the hospital association, the state's health insurers paint a very different picture of their results in the previous fiscal year.
Lora Pellegrini, president and CEO of the Massachusetts Association of Health Plans, noted that two large plans, Tufts Public and AllWays Health Partners, saw losses in 2020. She said "health plan margins were minimal" in most cases.
"Like the rest of the health sector, health plans faced financial uncertainty as a result of the COVID-19 pandemic," she said.
Overall, private commercial insurance coverage in the state declined by more than 153,000 members while individual purchasers of private insurance decreased by nearly 7%, she said.
"This instability paired with changes in utilization patterns and coverage of COVID-19 testing and treatment created great uncertainty for the insurance sector in 2020, and 2021 also promises to be a highly unstable and challenging year," Pellegrini said.
The Health and Hospital Association's report analyzed insurers’ fiscal situations by looking at recent trends in enrollment, premium rates, expenses and profitability.
Meanwhile, many of the state's safety net hospitals have reported record losses last year amid the pandemic, due to public health restrictions and a decline in elective surgeries.
Health care policy experts say the unresolved issue of rising costs hovers in the background of the wrangling between hospital and insurers.
"The hospitals and health care plans really need to stop pointing fingers at each other and fix the problem by lowering healthcare costs," said Josh Archambault, director of health care policy at the Pioneer Institute.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at firstname.lastname@example.org.