Mainly because of significant losses tied to its Affordable Care Act marketplace plans, Highmark posted an operating loss of $565 million in 2015, according to an article from the Pittsburgh Post-Gazette.
Highmark Health President and CEO David Holmberg said on a conference call Friday that the insurance company misjudged the extent of new marketplace enrollees who sought services, the article says. As a result, Highmark was paying out $1.20 worth of care for every $1 it received in premiums. That led it to lose $590 million on ACA plans alone--losses Holmberg called "unsustainable for anyone."
Overall, Highmark ended the year with $85 million in losses, according to the Post-Gazette. Highmark's vision, dental and stop-loss coverage profited about $229 million, while health plan and hospital-based sectors had a combined $474 million loss.
As FierceHealthPayer previously reported, Highmark announced that it will cut physician reimbursement rates for its ACA plans by 4.5 percent starting in April to account for its losses in the individual market, a move that has received quite a bit of push-back from doctors. Other major insurers have also struggled with their individual market business, including fellow Blue Cross Blue Shield insurers.
Despite the financial woes, however, the article points out that Highmark saw a 95 percent member retention rate, with its lower-cost narrow network, Community Blue, actually growing 70 percent. And Holmberg says Highmark is still on strong financial footing, citing a $1 billion increase in operating revenue.
To learn more:
- read the Post-Gazette article
Highmark will cut physician payments to stem ACA-compliant plan losses
Q4 earnings roundup: Big five insurers' ACA exchange woes deepen
Physicians push back against Highmark reimbursement cuts
BCBS members were sicker and more expensive following ACA expansion