Blue Cross/Blue Shield of Massachusetts reports $57.6 million profit for the 3rd quarter
Posted Nov 15 2008 10:21am
Health Insurance companies despite the downturned economy are still showing major profits and as stated below maintaining some pretty large “reserve” funds, money that basically just sits there and collects interest, which is some pretty large dollar amounts and the related reading below will give some idea as to how large these reserve funds are, just from 3 insurers in the state of Washington for an example.
With the profits, Blue Cross has now created a Venture Capital Organization to invest in perhaps software and other types of medical ventures and a Bank as well, and amongst all of this we still have the balance billing situation in California going on, fines paid by Blue Cross on denial of coverage or claims, hospitals on the brink of insolvency and some bankruptcies and closings, an unsurmounted amount of red tape and administrative time by physicians in assisting patients with claims, consumer bankruptcies and those who cannot afford health insurance, legal cases tied up in the courts, algorithms created to lower risk management that make it so very confusing for consumers to select a plan, donut holes in Part D coverage, insurers opening up new offices in China, and so on. What is this business really all about you might ask, has the focus extended itself way beyond health care and steering in the direction of investments for larger profits? BD
Blue Cross and Blue Shield of Massachusetts, Inc, announced combined third quarter earnings for its two branches, Blue Cross and HMO Blue, of $57.6 million after taxes. The traditional products earned $25.7 million on operations and $3.5 million in investments to see an after tax profit of $28.3 million. HMO Blue earned $29.8 million from operations and lost $528,000 on investments for an after tax profit of $29.3 million.
CFO Allen Maltz said the recent stock market turmoil served as a warning. “(The) historic market volatility ... is a reminder of the need for companies like ours to maintain sufficient financial reserves,” he said in a prepared statement.