The two largest HMOs in the West Michigan market continued to rack up strong earnings gains during the third quarter.
Market leader Priority Health more than doubled net income through the quarter over the same period a year earlier, according to the HMO’s quarterly financial report filed with the state regulators. Blue Care Network, the largest HMO in Michigan, grew earnings by more than two-thirds this year, according to a financial filing with the Michigan Office of Financial and Insurance Services.
Priority Health recorded net income of $44.3 million for the first nine months of 2004. That compares with net income of $20.6 million in the same period of 2003.
Grand Rapids-based Priority Health’s financial results included an underwriting gain of $41.3 million on premium revenues of $693.5 million, plus $3 million in investment income.
During the quarter, Priority’s Health’s HMO enrollment grew to nearly 359,000 people, up from about 335,000 a year earlier.
Blue Care Network, the HMO subsidiary of Blue Cross Blue Shield, reported net income of $45.3 million through the third quarter, a 69 percent increase over the $26.7 million during the same nine-month period in 2003. The earnings consisted of a $39.1 million underwriting gain on premium revenues of $1 billion, plus $6.1 million in investment income.
Blue Care Network’s enrollment base continued to decline, falling to nearly 463,000 at the end of the third quarter. That’s down from 478,000 enrollees a year earlier.
HMOs cite the stemming of the medical inflation trend this year with helping to boost earnings, which in turn is contributing to an easing of annual premium increases that in the last four or five years have averaged well into double-digit territory.
Priority Health’s premium increases for 2005 health plan renewals have been averaging 7.5 percent across all product lines and Blue Cross Blue Shield has delivered renewals that also are in the single digits.
“Customers are benefiting from better financial results through moderating increases,” Blue Cross Blue Shield spokeswoman Helen Stojic said.
Grand Valley Health, a small Grand Rapids-based HMO with about 18,000 enrollees, reported net income of $823,418 through September. Grand Valley Health Plan’s net income through the third quarter of 2003 was $322,494, according to its quarterly financial filing.