Highmark Back In The Black

HEATHER STAUFFER

HSTAUFFER@LNPNEWS.COM

A health insurer prominent in Lancaster County is back in the black.

Highmark recently reported overall profits of $59 million for 2016, after losing $85 million in 2015. Its net assets stand at $5.2 billion.

In a news release, Highmark Executive Vice President and Chief Financial Officer Karen Hanlon said the strong performance was driven by "substantial improvement" in health plan results, among other factors.

Highmark reported that its government business had $22 million in profits after losing $614 million in 2015. That segment of its business includes Medicare and Medicaid plans as well as individual plans offered through healthcare.gov, the Affordable Care Act marketplace.

In 2015, the nonprofit said, it lost about $590 million on marketplace plans. For 2016, after changes that shed more than half of its marketplace members in Pennsylvania, Highmark said marketplace losses were about $180 million.

In addition to higher-than-expected costs for marketplace enrollees, Highmark has attributed much of those losses to changes in the federal risk corridor program.

The Affordable Care Act authorized that program for three years to help insurers handle losses through the initial period of dramatic change.

But although it was expected to cover the previous year's claims in full annually, a congressional spending bill later stipulated that it could pay out only as much as was collected - which to date has been just a fraction of their losses.

Highmark and some other insurers have gone to court trying to force payment. To date one court has ordered the government to pay $214 million to an insurer in Oregon, but the cases for Highmark and others are still pending.

The latest employer survey conducted by the Central Pennsylvania Business Group on Health showed that Highmark had 36 percent of the market here, followed by Capital BlueCross at 24 percent and Aetna at 19 percent.