It was another lucrative year for Highmark Health, which reported Tuesday that its 2018 financial performance was second only to its highest-ever 2017 results.
The nonprofit is one of the largest insurers here, according to the latest survey of businesses by the Central Penn Business Group on Health.
Across its entire book of business, Highmark reported operating gain of $526 million and a total surplus of $570 million. For 2017, those figures — driven in part by a one-time gain from the sale of part of a vision business — were $616 million and $1.06 billion.
Surplus represents what for-profits would call profit, and what nonprofits like Highmark are required to reinvest in the community.
Highmark also said its balance sheet grew about $200 million to $6.7 billion, and that by year-end it had approximately $8 billion in cash and investments.
Highmark’s announcement came just after the Trump administration late Monday asked a federal appeals court to strike down the entire the Affordable Care Act — a move that would have a sweeping impact on the nation’s whole health care system.
Asked about that, president and CEO David Holmberg said Highmark has never taken a position on the law from a political standpoint and has tools and capabilities to navigate “regardless of what’s happening in Washington.”
He also noted that he expects twists and turns on the issue and said, “That’s one of the reasons why it’s so important to have the financial strength and stability that we have as an organization.”
Highmark leaders also stressed that the organization put more than $470 million into projects across the system, including its strategic partnership with Penn State Health.
In a conference call with reporters, Highmark leaders said for 2019 about 105,000 Pennsylvania residents have individual Highmark plans that meet Affordable Care Act requirements, of which about 70 percent were obtained through healthcare.gov.
That’s down significantly from about 270,000 in 2015 — the year in which Highmark said it lost about $590 million on marketplace plans, and subsequently hiked prices.
In all, 365,888 Pennsylvania residents used healthcare.gov to get coverage this year.
Highmark’s news release said the cost of care for its Affordable Care Act members has stabilized, and that the organization saw a nearly $90 million reduction “in corporate and other expenses, driven by continued expense control and gains from the first full year of earnings through our investment in Penn State Health.”
Highmark is also continuing a lawsuit seeking federal payment of about $600 million in “risk corridor” payments, according to Deb Rice-Johnson, president of Highmark Health Plan.
The three-year program under the Affordable Care Act was expected to cover the previous year’s claims in full annually, but a congressional spending bill later stipulated that it could pay out only as much as was collected.
Insurers across the nation say they’re owed about $12 trillion from the program, and Highmark is among insurers that recently filed briefs in support of the U.S. Supreme Court hearing risk corridor cases.
Highmark’s most recent publicly available tax documents are for 2016, and show that Holmberg had total reportable compensation of almost $2.6 million.
Capital BlueCross, another prominent nonprofit insurer here, does not issue a news release with its financial results.
After years of bleeding money from selling plans on the Affordable Care Act exchanges, Highmark turned a profit in that business for the first time in 2017 after hiking premiums and narrowing its networks. https://t.co/Px3Y5xM5Vz pic.twitter.com/Pz7NuhbaKB— Modern Healthcare (@modrnhealthcr) March 27, 2019