NM Health Connections Loses $23 MillionBY DENNIS DOMRZALSKI It was a mostly down year financially in 2015 for three of New Mexico's major health insurance companies. New Mexico Health Connections, the state's nonprofit insurance company formed under the Affordable Care Act, lost $23 million last year, a huge increase from the $4.3 million it lost in 2014, according to its latest financial report. But the co-op wasn't the only health insurer to lose money. Molina Healthcare of New Mexico, Inc., which serves mostly Medicaid patients, lost $1.6 million, an improvement from the $24.9 million it lost the year before. Presbyterian Health Plan made $29.8 million last year, but that was a big drop from the $71 million it made in 2014.
All three companies saw big increases in their prescription drug costs, which has affected their bottom lines.All three companies saw big increases in their prescription drug costs, which has affected their bottom lines. New and expensive drugs—like those to cure hepatitis C and that cost $80,000 per regimen—have been responsible for the increase in drug costs, health insurance experts have said. Drug costs for Presbyterian Health Plan grew to $114 million from $86.6 million in 2014. At Molina, they climbed to $105.9 million from $88.5 million, and at Health Connections they grew to $22.3 million from $5.1 million. Both Presbyterian and Molina had about the same number of members in 2015 as they did the previous year. NMHC is a startup whose membership grew to 34,410 in 2015 from 14,297 the prior year. It now has nearly 50,000 members.
The big question is whether NMHC can survive and eventually make money.The big question is whether NMHC can survive and eventually make money. The co-op was was one of 23 that formed with government grants under the ACA. So far, 12 of the co-ops have gone out of business. Health Connections CEO Dr. Martin Hickey said that, while the company lost money last year, it is on track to have a profitable first quarter. He also said that nearly every insurer in the nation lost money last year on individual policies sold through the various health insurance exchanges. “It looks like we will have made money in the first quarter, and that is a huge turnaround,” Hickey said. “Everyone lost. We have measured ourselves against many others and we have lost much less per member than virtually every insurance company that has gone public.” In recent interviews, New Mexico Superintendent of Insurance John Franchini said he's not worried about Health Connections. He said the firm has more reserves that required and that he expects it to be profitable this year. Dennis Domrzalski is news editor of ABQ Free Press. Reach him at email@example.com.
Mixed Financial Results: 2015 Hurt NM Health Insurers is courtesy of ABQ Free Press