Unfavorable Profit Margins and Mixed Enrollment Results for Top Health Plans in First Quarter 2016
MCMURRAY, Pa.--(BUSINESS WIRE)--In the latest Healthcare Business Strategy report, Mark Farrah Associates (MFA), www.markfarrah.com, assessed first quarter 2016 enrollment and profitability for Aetna, Cigna, Health Care Service Corporation (HCSC), Humana, Kaiser Permanente, UnitedHealth Group and Anthem. MFA reported that leading companies added nearly 1.97 million total medical members since first quarter 2015 yet all of these companies saw declines in profit margins. Total membership for the top health plans as of March 31, 2016 was 149.1 million, up from 147.1 million in 1Q15. Membership data, financial statistics and observations were gleaned from the April 2016 Health Insurer Insights™ series and the Health Coverage Portal, Mark Farrah Associates' products.
Among the 7 leading health plans, all but three insurers realized net gains in the total number enrolled in Commercial, Medicare and Medicaid plans for 1Q16, reflecting varying degrees of both growth and decline in risk-based and self-funded medical membership. It is important to note that MFA assessed total comprehensive medical membership, therefore, Medicare Supplement enrollment was excluded when MFA found it was integrated with other medical membership figures.
As of March 31, 2016, UnitedHealth maintained its position as the industry leader with nearly 39.4 million medical members, a 1.73 million increase from 37.7 million in first quarter 2015. Note that UnitedHealth's Medicare Supplement membership of over 4 million was not included in this assessment. Anthem enrolled nearly 38.8 million medical members, including approximately 5.6 million BlueCard members, an increase of 3% year-over-year. For the purposes of this assessment, MFA excluded approximately 848,000 Medicare Supplement lives from Anthem's total medical membership.
Cigna and Kaiser also reported increases in their medical membership of 3% and 5.6% for first quarter 2016, however Aetna, Humana and HCSC experienced enrollment declines. Aetna reported a decrease of 805,000 members from approximately 23.2 million in 1Q15 to 22.4 million in 1Q16, reflecting declines in its commercial insured products. Humana's medical membership decreased from 9.61 million in first quarter 2015 to 9.2 million during the same period in 2016. HCSC experienced a 9.5% decline in risk-based membership, year-over-year, partly as a result of a loss of nearly 507,000 individual members, partly due to the company's withdrawal from the New Mexico exchange in 2016 and the impact of discontinuing its PPO plans in Illinois and Texas.
MFA assessed segment reported revenue and net income for the calculation of profit margins for four of the seven health plans; Aetna, Kaiser, UnitedHealth and Anthem. For the three months ended March 31, 2016, all of these companies saw year-over-year declines in profit margins. Kaiser's first quarter 2016 operating margin was 3.12%, down from 6.78% at 1Q16, the most significant decline of the four companies. Anthem's 1Q16 profit margin was 3.5%, down from 4.5% a year ago. UnitedHealth's profit margin decreased from 5.82% in 1Q15 to 5.16% in 1Q16. And lastly, Aetna experienced a 4.3% decline in profit margin, from 5.3% in 1Q15 to 5.1% in 1Q16.
To read the full text of "First Quarter 2016 Profits Plummet for Leading Health Plans while Enrollment Results Remain Mixed," visit the Analysis Briefs library on Mark Farrah Associates' website.
About Mark Farrah Associates (MFA)
Mark Farrah Associates is a leading business information provider in the health insurance sector. We provide health plan market data and analysis tools for the healthcare industry and our products include Health Coverage Portal™, County Health Coverage™, Health Insurer Insights™, Health Plans USA™, Medicare Business Online™, Medicare Benefits Analyzer™ and SHCE & MLR Annual Data™. To learn more about our products, access the product brochures and preview videos in the Products section of our website at www.markfarrah.com.
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