MVP reports increased revenue, income for 2009
CAPITAL REGION Schenectady-based MVP Health Care rebounded in 2009, with increased revenue and a non-operating income gain of $54.4 million that helped offset an $8.3 million loss on operations caused by unexpected state-imposed surcharges and assessments of $27 million.
The insurer reported $3 billion in total revenue for 2009, up from $2.53 billion in 2008.
As a not-for-profit insurer, MVP is required by law to have a reserve fund for surplus revenue in order to provide for unexpected expenses and ensure “plan stability in the long term,” according to MVP spokesman Gary Hughes.
MVP was able to make a contribution of $46.1 million to its reserve fund based on its performance in 2009, bringing the total reserve fund balance to $332.1 million at the end of fiscal year 2009. A year ago, MVP reported a loss of $28 million, which left its total reserve fund at $290.7 million at the end of 2008.
Thomas Combs, MVP’s executive vice president and chief financial officer, said the operating loss was a reflection of health care spending outpacing premiums along with unbudgeted state surcharges and assessments.
“After experiencing a difficult year in 2008, we are pleased that our overall 2009 results demonstrate that we are moving in the right direction and that we have the financial strength necessary to meet the needs of our employer customers, providers and members,” he said.
The increasing cost of premiums along with high unemployment drove a 4 percent decline in enrollment, MVP said.
Enrollment for February 2010 was 759,000, down from 795,000 February 2009, but MVP said this year’s enrollment is still higher than 2007 levels. In order to keep aligned with market needs and stay focused on its operational business plan, Hughes said MVP recently reorganized its sales and marketing division.
As a result, a total of four jobs were eliminated — two in Schenectady, one in Fishkill and one in Vermont as six jobs in Schenectady were created, resulting in a net increase of two jobs.
Total corporate employment is at 1,800, with a majority — 1,050 — located in Schenectady. The rest of its employees are spread among Rochester and other regional offices, according to Hughes.
MVP, a provider of employer insurance benefit plans, dental insurance, and additional products to subscribers in New York state, Vermont and New Hampshire, is actively recruiting people to fill 70 open positions concentrated in three areas, Hughes said — health services, information technology and finance.
Other health insurers with a presence in the Capital Region also reported gains in revenue for 2009.
Buffalo-based HealthNow New York Inc., the parent company of BlueShield of Northeastern New York, saw its revenue increase to $2.45 billion last year, up from $2.27 billion in 2008. Contribution to reserves were $100 million, which along with significant investment gains, brought its fund balance to $546 million.
Enrollment remained flat in 2009 compared with 2008, as membership levels hovered around 800,000.
HealthNow said medical claims paid to health care providers — the primary driver of premium rate increases each year — rose 8.5 percent last year as medical service usage increased.
Alphonso O’Neil-White, HealthNow New York’s president and chief executive officer, said the insurer made efforts to increase accessibility to health care services through online care as well as expand its third-party administrative services nationwide as part of its growth strategy.
“While it was a tough year for everyone in this strained economy, the environment helped us to focus on necessary changes to our service and delivery platform: one that’s responsive and flexible, customer-centric and creative in the face of challenges,” O’Neil-White said in a statement.
Excellus Health Plan, a Rochester-based insurer with a presence in Fulton and Montgomery counties, had revenue of $4.9 billion as it contributed $46.6 million to reserves, bringing its total fund balance to $965 million in 2009. Investment income of $75 million helped offset an operating loss of $6.6 million.
Enrollment at the end of 2009 was 1.7 million and has increased by 38,000 members so far this year, the company said.
“The recession took its toll on upstate New York and our business in 2008, but the steps we took to curb spending throughout 2009 helped offset those effects,” Excellus Chief Financial Officer Zeke Duda said in a statement. “Because of the political hype about insurer profits, most people would probably be surprised to know that our premiums are well below national average and our operating margins have averaged less than 2 percent since our mergers took place in the 1990s.”