GRAND RAPIDS — Priority Health almost tripled its revenue in 2022, but it’s not yet known how that will affect future rate proposals next year.
Grand Raids-based health insurance posted annual net income of $209.9 million across all product lines. This result includes his $59.4 million operating profit on his $6.21 billion in premium income from the sale of health insurance. Investments, primarily from dividends from subsidiaries, generated $150.8 million.
By comparison, Priority Health posted a 2021 net profit of $76.4 million on revenue of $11.84 billion. 2021 earnings included $33.4 million in operating income and his $43 million investment.
Chief Financial Officer Nick Gates said of the 2022 financial results, “It’s really a great achievement given the performance of the industry, especially the other health plans in Michigan.”
By comparison, the much larger Michigan Blue Cross Blue Shield recently posted a net loss of $777 million on 2022 revenues of $32.8 billion. This is due to rising operating costs, investment losses and his ongoing COVID-19 response. The loss comes after the Blues reported his $360 million net profit in 2021 on his $32.5 billion earnings.
Growth in Priority Health has been driven by health plans responding to the trend of high medical bills due to the pandemic and rising costs of prescription drugs, especially expensive gene and cell therapies.
“We are optimistic that we are well positioned for growth in 2023,” Gates said. “We have a very strong balance sheet.”
“It’s too early to say,” Gates said, as to how 2022 results will affect pricing plans for 2024. Next year’s rate applications are expected to be submitted to state regulators this spring.
Priority Health plans to factor the costs of the pandemic into its 2024 pricing proposal. This is the first time the company and other insurers have done it in his 2023, a year before him.
Gates said last year’s health plan spent $267 million on testing and treating members who contracted the virus, as well as administering vaccines. Of that amount, he said $250 million was spent on medical claims to treat members for COVID.
“Our team is focused on reducing health care costs to minimize any increase in insurance premiums, and we’ll see what they look like in the summer,” Gates said.
Similarly, Michigan’s Blue Cross Blue Shield amends the cost of COVID to its 2024 rate proposal. The state’s largest health insurer paid him $739 million in COVID-related medical claims last year.
At a media call last week to discuss Blue Cross Blue Shield’s 2022 financial results, Joe Radtka, vice president of enterprise finance and chief risk officer, said members will be tested and treated for COVID and vaccinated. Expenses, he said, are now a commonplace in pricing.
“In 2024, COVID is now part of a general baseline trend within the core cost of providing[services]to customers. It will continue as we move forward to become part of the traditional We anticipate that we will need to add value to our business and serve our customers to cover COVID-related costs,” Radtka said.
Priority Health and most health insurers have received approval from state regulators for higher rates in 2023 than they have in recent years, partly because of the pandemic-related costs they absorbed in 2020 and 2021. I was.
Priority Health’s separate HMO policy prices increased by an average of 6.7% statewide and 7.6% for small group plans. PPO plans increased an average of 7.6% statewide.
Among certain product lines, Priority Health’s 706,000-member HMO accounts accounted for three-quarters of revenue and will grow to 2022 net Earnings were $111.9 million and total revenue was $4.69 billion. HMO made an underwriting profit of just $417,883 in health insurance, and in net investment income he earned $111.5 million.
Priority Health’s 266,000-member Medicaid HMO, Priority Health Choice Inc., earned $65.8 million on $1.16 billion in total revenue.
Priority Health Insurance Co., which sells fully insured health insurance, posted a net profit of $1.8 million on revenue of $361.6 million. The results included an operating loss of $717,672 in health insurance, more than net investment income of $2.8 million less federal taxes of $287,554, according to a financial report provided to MiBiz by Priority Health. was.
Total Health Care Inc. and Total Health Care USA Inc., two Detroit-based Medicaid HMOs acquired by Priority Health in 2020, had revenues of $28.6 million and $1.7 million, respectively, last year.
