Independence Blue Cross’ parent company posted strong financial results for 2021, in part because members of its Medicaid and Medicare plans remained reluctant to seek medical care during the pandemic.
The region’s largest health insurer said on Tuesday revenue rose 13% last year, to nearly $25 billion, and its 2021 net income soared 31%, to $816 million. dollars, compared to 2020. Independence’s profit margin increased for the second consecutive year, reaching 3.3%.
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Gregory E. Deavens, president and chief executive of Independence Health Group, attributed the strong earnings to revenue growth, $248 million in pretax profits from investments and good spending discipline, in addition the fact that some IBC members stay away from doctors’ offices – which has been hard on hospitals and healthcare systems.
“Our strong growth and diversification strategy has helped us stay financially strong through another year filled with uncertainty,” Deavens said.
Independence’s majority-owned Medicaid subsidiary, AmeriHealth Caritas, continued to account for about two-thirds of the company’s revenue — $17 billion last year.
Independence owns 61.3% of AmeriHealth Caritas; Michigan’s Blue Cross Blue Shield owns the rest.
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AmeriHealth Caritas has Medicaid plans in eight states and Washington D.C. It started last year in North Carolina, which added $658 million in revenue in the last six months of 2021, the chief financial officer said. Independence, Juan Lopez. This year, the subsidiary will be launched in Ohio.
Medicaid activity also benefited from the National Public Health Emergency’s emergency rules, which are due to expire on Saturday. They meant that states had not regularly reassessed Medicaid enrollees to see if they were still eligible for government insurance for low-income people.
It is too early to tell what impact the expiration will have on independence. States take different approaches to deciding whether individuals are still eligible for Medicaid, Deavens said.
Some of the people who lose Medicaid could end up in the Affordable Care Act plans offered by Independence through Pennie, Pennsylvania’s health insurance marketplace, Lopez said.
Independence had 7.7 million people enrolled in its insurance plans and other companies at the end of 2021. That included 2.7 million in AmeriHealth Caritas Medicaid plans.
The total was down from 8.2 million at the end of 2020. Lopez attributed the sharp drop to the loss of a major drug benefit administration contract in the Medicaid unit.
“It was a very small slice of the business and had minimal impact on our bottom line,” he said.