State’s Other Major Insurers Were Also Profitable
BY DENNIS DOMRZALSKI
New Mexico’s startup health insurance company, New Mexico Health Connections, reported a profit in the first quarter, the first time it has made money since it began selling policies in late 2013.
While the $420,112 in net income wasn’t enormous, it was a big turnaround from the $2.3 million the company lost in the first quarter of 2015, and from the $23 million it lost last year.
Health Connections CEO Dr. Martin Hickey said one reason the company made a profit was its philosophy of trying to keep people well and keeping them out of hospitals.
“The healthcare system in our country is experiencing a great deal of change right now. Most insurers lost money last year,” Hickey said. “However, New Mexico Health Connections’ philosophy from the start has been to help our members be as healthy as possible. While it is still early in the year, the Q1 financial results are a positive indicator that our approach to member care is the right one.”
New Mexico Superintendent of Insurance John Franchini said NMHC’s first quarter profit represents a turnaround for the cooperative health plan that was formed as part of the federal Affordable Care Act.
“I think that they have turned it around and I’m excited because I think they are managing their health claims better and they are getting people well,” Franchini said. “In the long run, they need more capital to be a player for the next 20 years. They can get that capital by making profits.”
NMHC grew its membership base to 46,135 in the first quarter, up from 34,410 from the same period last year. Premium income for the quarter was $39.2 million compared to $24.1 million for the first quarter of 2015.
New Mexico’s other major health insurers also made money in the first quarter. Presbyterian Health Plan, which has 326,000 paying members, reported a profit of $10.9 million, compared to $4.1 million in the first quarter of 2015.
Molina Healthcare of New Mexico, which has mostly Medicaid members, reported a $5.5 million profit for the quarter, a big turnaround from $2.2 million loss it reported for the same period the previous year.
And UnitedHealthcare of New Mexico, which is also a Medicaid provider, reported a profit of $10.8 million, up from the $7.5 million loss in the first quarter of 2015.
NMHC was one of 23 insurance co-ops that were formed under the ACA. So far, 11 of the co-ops have gone out of business.