Friday, February 2, 2024

Mayo and The Blues are doing alright in Minnesota

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I don't know much about nonprofit health insurance, other than its almost impossible to be exempt under 501(c)(3) without being structured like Sound Health.  I have never understood, really, the story behind Blue Cross Blue Shield.  I know they are sorta-kinda tax exempt under IRC 833, but certainly not as much as they were before 1986 -- before 501(m).  So I am not sure what is remarkable about a recent article about the wealth of nonprofit health insurers in Minnesota.  But Star-Tribune article seems interesting to post about.  Maybe the nonprofit health care geeks will find it interesting and enlighten us.  Here is an excerpt:

Minnesota's largest nonprofit groups once again are all about health care, the Star Tribune found in its annual review. Eight are primarily health systems that run hospitals and clinics. Three are health insurers. And one is a hybrid, straddling both sides.

And while hospital operators have faced significant challenges recently, it's the health insurers that enjoyed a three-year period of annual profits up through the most recent 2022 data, according to an analysis on financial performance and executive compensation at Minnesota's big nonprofits.

The large nonprofit insurers — Blue Cross and Blue Shield of Minnesota, HealthPartners, Medica and UCare — had to pay fewer medical claims during the early COVID era. In addition to lower payments, their balance sheets were then bolstered, to varying degrees, by record-setting income from the state's Medicaid program.  Yet these same businesses are now bracing for rising health care costs and tough questions at the state Capitol that could affect their income.

Minnesota DFL lawmakers passed a bill last year that could eventually prevent the largest nonprofit and for-profit health plans from managing patient care in Medicaid and related programs for lower-income residents. By January 2026, the state Department of Human Services must develop an implementation plan for a new approach that might include dropping the big managed care organizations.

darryll k. jones

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Revenues do not equate to profitability, much less sustainability. Fairview Health is losing more than $1 million A DAY at present. After a second failed merger attempt with Sanford Health, it looks like Fairview will need a bailout from MN state government to avoid closing more of its facilities (it sold a couple already).

Sanford Health isn't on the MN list because it's based in South Dakota, but Sanford operates significant hospitals and clinics in MN. Overall, Sanford Health is a $7.5 billion revenue nonprofit.

Posted by: Michael L. Wyland | Feb 2, 2024 8:47:30 AM

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