As health insurance membership grows, so too are profit margins for some of the largest managed care companies, although of course that's not the case for every health plan.
The leading American health plans increased medical membership by more than 5 percent last year in total, according to a study by Mark Farrah Associates. Another company can also lay claim to the title of nation's largest insurer, depending on how the membership is counted.
The Kennebunk, Maine-based Mark Farrah tracked enrollment and profitability for Aetna, Anthem, Cigna, Health Care Services Corporation, Humana, Kaiser Permanente and UnitedHealth Group. All but UnitedHealth saw increases in enrollment through the end of last year.
As UHG's membership (excluding Medicare Supplement) declined from 37.2 million to 36.8 million, Anthem's membership increased 1.9 percent to 37.5 million, making the for-profit Blue Cross company "the leading health plan based on total membership," according to Mark Farrah Associates.
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If Medicare Supplement plans are included, UnitedHealth remains the nation's largest health plan, counting 41.6 million U.S. members in March 2015 across commercial, Medicaid and Medicare segments. Excluding 3.9 million Medicare Supplement members, United's membership stands at 37.7 million. Anthem's total membership at the end of the first quarter was 38.5 million, including about 500,000 members in Medicare Supplement plans from its 1.4 million Medicare customers.
It was back in 2012 that United overtook Anthem (then WellPoint) as the largest insurer, so the position may fluctuate in the years to come.
Aetna still remains the third largest health plan, with 23.1 million members at the end of 2014, up 1.3 percent from 2013, Mark Farrah found.
HCSC remained the fourth largest insurer and largest nonprofit, with Blues plans in Illinois, Montana, New Mexico, Oklahoma and Texas and a multi-state large group plan. The mutual company's membership increased slightly by 1.2 percent, to 14.5 million at the close of 2014.
Behind HCSC was Cigna, with 13.7 million health plan members (up more than 2 percent), and Humana with some 13 million members and Kaiser Permanente with more than 10 million members. Humana saw the largest increase in risk-based enrollment, which was up 27 percent, but it also lost administrative services only membership, a segment the company is rethinking its interest in, any way.
Profit margins for most of these companies increased as well, Mark Farrah Associates found. "Health insurers continue to strive for cost containment while investing in reform-driven expansion initiatives, technology and partnerships to sustain and grow business for the long term," the report said.
Kaiser Permanente had a 2014 net income of $3.1 billion on revenues of $57.6 billion, a profit margin of 5.34 percent. UnitedHealth's margin declined from 6.3 percent in 2013 to 5.8 percent in 2014, but still a net income of nearly $7 billion on total revenues of $119.8 billion. The company chalked up the margin decline in part to ACA fees and Medicare Advantage rate reductions.
Aetna's 2014 profit margin stood at 4.0 percent (down from 4.3 percent), with $2.2 billion on revenues of $55.1 billion. Anthem's margin was 3.5 percent, earning $2.5 billion on $73.8 billion.