Tufts Health Plan Reports First Quarter Financial Results
May 17, 2010
Watertown, Mass. - Tufts Health Plan today reported a net loss of $51.9 million for the quarter ended March 31, 2010. Net loss includes investment income of $7.1 million, and operating loss of $59.0 million, with revenues of $630.8 million. The health plan had a total net worth of $613.5 million and no debt. Membership was 739,402 at the end of the quarter.
According to Umesh Kurpad, chief financial officer, "The largest contributor of our first quarter net loss includes a $40 million provision resulting from the imposition by the state's Division of Insurance of what are effectively rate caps that do not allow the plan to charge for the actual costs of medical services being covered in the small group segment. While the core operating results of the company continue to meet our expectations, albeit with the seasonal losses associated with the first quarter, the effect of an unbalanced rate regulation is a significant and unsustainable drain on our financial resources. These resources, which are typically reinvested in the company through expanded technology and programmatic improvements, are used also to meet increasing regulatory requirements. In addition, these resources have been tapped to balance the Commonwealth's budget and to pay for statewide immunization costs. Continued losses erode our ability to meet needs such as these.
"Moreover," he continued, "the well-documented drivers of escalating health care costs have not yet been addressed in the rate regulation. Tufts Health Plan looks forward to continuing the dialogue and contributing to a solution that is fair and equitable for all parties."
The results compare to the year-ago quarter when Tufts Health Plan reported a net loss of $13.1 million for the quarter ended March 31, 2009. Net loss includes investment income of $3.5 million, and operating loss of $16.5 million with revenues of $598.8 million. At that time, the plan had a total net worth of $543.5 million and no debt. Membership was 721,788 at quarter's end.
Tufts Health Plan is a nonprofit health plan with a national reputation for excellence. The organization is recognized for its commitment to providing high-quality health care coverage and innovative solutions for its employer customers. Its HMO and POS products are ranked third in the nation, and its Medicare Advantage program is ranked fourth in the nation by the National Committee for Quality Assurance. More information about the health plan can be found on our Web site.