You can now read 10 articles in a month for free on BostonGlobe.com. Read as much as you want anywhere and anytime for just 99¢.

The Boston Globe

Business

State health insurers post mixed financial results

The state’s biggest health insurers ­reported mixed first-quarter financial results Wednesday, with two notching income gains, one registering lower earnings, and one posting a loss.

While all of the health insurance companies said they were working to hold down premiums as they rolled out new products and shifted doctors and hospitals to risk-sharing payments, each cited unique factors influencing financial performance in the three months ending March 31.

Continue reading below

First-quarter operating earnings are typically weak for health insurers because that’s when many people decide to go ahead with elective surgeries and other procedures they postponed during the holidays. But that downturn was offset by investment income at most of the plans.

Harvard Pilgrim Health Care turned in the strongest quarterly results, reporting its net income rose 150 percent to $8.5 million from $3.4 million in the same period last year.

The Wellesley-based insurer benefited from adding more than 49,000 new members over the past year in Massachusetts, New Hampshire, and Maine, the three states where it operates.

Earnings climbed 11.7 percent to $5.7 million during the January-to-March period at Tufts Health Plan, which recorded net income of $5.1 million for the corresponding period in 2012.

Tufts, based in Watertown, said it was managing its costs better and ringing up profits in its commercial and Medicare businesses, though the insurer has been losing money in the Medicaid insurance market it entered in 2011 after acquiring Network Health in Medford.

First-quarter net income slipped 6 percent to $28 million from $29.8 million a year earlier, at Blue Cross Blue Shield of Massachusetts, the state’s largest health insurer. While lower bond yields shaved $1.7 million off investment income, it was “a good, normal quarter” overall for the Boston-based plan, according to Allen Maltz, chief financial officer for Blue Cross.

The quarter wasn’t as kind to Fallon Community Health Plan. The company absorbed a $200,000 net loss, down from $4.2 million in net income a year ago. The Worcester-based insurer said the results were consistent with expectations, noting that it invested heavily in information technology — including new business, data storage, and reporting systems — during the quarter.

Moving forward, executives at the health insurers said they are monitoring changes in the underlying “medical trend” — a mix of how much health care services are used and the cost of each visit, test, and procedure. So far this year, they said, medical costs have gone up less than anticipated.

“We’ve benefited from a relatively low [medical] trend environment, but I don’t think that will last too long,” said Umesh Kurpad, chief financial officer at Tufts Health Plan. Over the next 12 months, he said, costs associated with insurance offered through employers will likely start to trend upward.

Maltz noted that the economic recovery is still a work in progress, so it’s not yet clear how improving conditions will affect insurance costs.

“We haven’t really seen what typically happens in a recovery, which is people coming back to work or feeling their jobs are stable and starting to use their health care benefits,” he said. “I expect to see that, but I haven’t seen it yet.”

Robert Weisman can be reached at weisman@globe.com. Follow him on Twitter @GlobeRobW.
Loading comments...

You have reached the limit of 10 free articles in a month

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week