Health plans in New York State continue to thrive financially, recording $1.4 billion in net income for 2007, for a total margin of 4%. Net income declined slightly from $1.7 billion in 2006, which was a record surplus year for health plans. Overall, health plan income increased 93% from 2001–2007. The aggregate medical loss ratio (MLR)—or percentage of the premium used to pay for health care services—increased to 87%, up two percentage points from 2006. Fifteen of the 24 plans reported MLRs of 85% or higher.
     
Health maintenance organizations (HMOs) accounted for 45% of the total net income with $632 million and a 5% total margin. While HMO total member months decreased 32% from 2001–2007, net income per member per month (pmpm) increased 125% to $20 pmpm in 2007.
     
Continuing its market dominance, Empire reported the largest profits with $499 million, up from $450 million in 2006. The company also reported a 6% profit margin and took in $14 pmpm. Oxford’s profits ranked second to Empire with $375 million in income (9% margin, $19 pmpm). Rounding out the top five earners were: Excellus with $84 million in income (2% margin, $4 pmpm); Rochester Area HMO with $78 million in income (8% margin, $32 pmpm); and HealthNow with $76 million in income (4% margin, $11pmpm). These five plans represented 78% of the total profits.
HIP’s financial performance deteriorated in 2007, dropping from a net income of $209 million in 2006 to $56 million in 2007 and raising potential questions about the timing of the for-profit Emblem conversion. It is also worth noting that underwriting gains on health plans’ Medicare business continue to contribute significantly to plan surpluses, comprising 35% of total underwriting gains, up from 31% in 2006. Federal cutbacks in this area could impact future health plan financial performance.