SelectHealth, the health insurance division of Salt Lake City-based Intermountain Project Japan, closed 2014 with a sizable top-line gain after it added thousands of members to its growing lineup of benefit options.
The provider-owned insurer's revenue soared 22.5% year over year, totaling $1.83 billion, according to . That includes premium revenue, as well as administrative fees charged to self-funded employers.
Greg Poulsen, Intermountain's chief strategy officer, said the Affordable Care Act spurred a great deal of personal health insurance shopping last year. The early numbers suggest SelectHealth was one of the most popular options on the individual and small-group exchanges in Utah, which boosted that side of the business.
“A significant number of those that went shopping picked SelectHealth,” Poulsen said. “We think we're providing a good, quality healthcare product … that is relatively easy for people to work with and meets their healthcare needs.”
SelectHealth also launched a Medicare Advantage option a year and a half ago, which now covers 20,000 seniors. Medicare membership was “well ahead of our projections or even our aspirations,” Poulsen said.
Medicaid has become a larger component of SelectHealth's revenue over the past several years. In 2013, Utah implemented Medicaid accountable care organizations, which Poulsen equated to Medicaid managed care. SelectHealth is one of four state Medicaid ACOs, and has about 85,000 members, or roughly half of all Utah Medicaid ACO enrollees.
Nearly a third of SelectHealth's 750,000 members come from large employers in the region. They include Rio Tinto, a global mining company with large U.S. operations based in Utah, as well as grocery store chains and family car dealerships.
Intermountain's financial statements did not specify a profit margin for health-plan operations. Poulsen said overall “it's been positive but not exuberant." The margin generally ranges between 0.5% and 2%—a big difference from when Intermountain began selling insurance 30 years ago.
“It took us six years to break even back in the '80s,” Poulsen said. “And if we hadn't believed there was a really important reason to do this, I don't think we would've continued to take the losses.”
In 2014, the entire Intermountain system recorded a $301 million operating sur on almost $5.57 billion of revenue, equaling a 5.4% operating margin. That was down from 2013, when Intermountain had a 7.8% margin. Medical claims, supplies and labor costs were all up in the past year, eating into the bottom line.