IBC reports 25 percent drop in profits

The plan is offered by Blue Cross companies in Pennsylvania and has 6,300 subscribers.
The plan is offered by Blue Cross companies in Pennsylvania and has 6,300 subscribers. (AP)
Posted: June 11, 2014

Independence Blue Cross' profits tumbled last year to their lowest level since the region's largest health insurer lost money in 2008 and 2009, according to IBC's annual report on its website.

The Center City company reported net income of $142.6 million in 2013, down by a quarter from $191.5 million in 2012, despite a 5 percent increase in revenue, the annual report's bare-bones financial statement said.

Total revenue was $11.05 billion, up from $10.48 billion, the company said.

"Amid dramatic changes in health care, we are pleased to report a year of financial stability," M. Walter D'Alessio, chairman of IBC's board of directors, and Daniel J. Hilferty, the company's chief executive, said in a commentary at the beginning of the annual report.

Asked Monday for more detail on 2013's net income decline, IBC said first that medical costs had increased. The company spent 84.7 percent of premiums on medical claims, up from 83.9 percent in 2012.

Plus, IBC said, "it was necessary to make significant investments in the right technology, tools, and processes in order to prepare for servicing our new individual customers - many who have never had health plans before."

In May 2013, IBC held a teleconference for reporters and issued a news release for its 2012 financial results. This year the report was posted on the website with no fanfare in early May, IBC said.

On a positive note for IBC, the rate of decline in the number of employer groups it insures fell sharply. IBC served 34,498 employer groups last year, down less than 1 percent from 34,670 in 2012.

In six of the previous seven years, the number of employers obtaining insurance for employees through IBC had fallen by at least 5 percent.

IBC said it employed 8,568, up from 7,472 at the end of 2012. AmeriHealth Caritas, which manages government-funded health insurance programs and has operations in 16 states, accounts for about 4,000 of those employees.

In Center City, IBC employs 3,549, about the same as it did a year ago.

The company said it added $228 million to its surplus, or rainy-day fund, bringing it to $2.73 billion.

While IBC's highest-level holding company is tax-exempt, most of its businesses pay federal, state, and local taxes, not including payroll taxes for the benefit of its employees taxes. In 2013, those taxes totaled $268 million, up from $250 million in 2012.


hbrubaker@phillynews.com

215-854-4651

@InqBrubaker

comments powered by Disqus
|
|
|
|
|