CA insurers spent less than 85 percent of revenue on care

A new report by the California Medical Association concludes that nine of the state's major health plans spent less than 85 percent of their revenue on medical care for their beneficiaries, a level which would become law if the state legislature passes a bill the CMA supports.  

The CMA's medical spending report, which addresses the fiscal year ending June 30, 2007, uses data collected by the state's Department of Managed Health Care. Spending ranged from a low of 69.4 percent for Great-West Healthcare of California, to publicly-owned L.A. Care Health Plan, which spent 97.1 percent of revenue on care. Cigna weighed in at 94.3 percent, while WellPoint-owned Blue Cross of California came in at 79 percent. Kaiser Foundation Health Plan had a medical loss ratio of 90.6 percent.

By the CMA's calculations, if all of these plans had spent 85 percent of their revenue on care that year, it would have resulted in $1 billion more to pay providers, with the majority ($933 million) coming from California's two Blue plans.

To learn more about the report:
- read this AMNews piece

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