MINNEAPOLIS, April 18, 2008—Doctor visits, hospital stays and other medical care costs reached $14.3 billion in 2007, an increase of nearly 7 percent, for Minnesota’s eight nonprofit health plan companies, according to a report by the Minnesota Council of Health Plans.

The industry posted combined losses of $71 million, making 2007 the third straight year of operating losses. The industry used interest income primarily generated from investing its reserves to cover the shortfall.

The industry paid more than $218.8 million in taxes and assessments, a 26 percent increase in the last four years. Taxes and assessments paid to the state of Minnesota are the second largest component of administrative costs.

In addition to taxes and work required to operate the health plan, other administrative expenses included $72 million in community investments such as MN Community Measurement, Institute for Clinical Systems Improvement, health and wellness education, and other community benefit programs.

Ninety cents of every premium dollar was dedicated to patient care, while 10 cents was spent on administrative costs. The medical care spending for employer-sponsored and individual coverage include:

• 6 percent increase in inpatient hospital costs
• 13 percent increase in emergency services costs
• 10 percent increase in outpatient costs
• 5 percent increase in physician services costs
• No increase pharmacy and medical supplies costs

While overall enrollment grew less than 1 percent to more than 4.16 million, the number of people enrolled in fully insured small group plans (2 to 50 employees) dropped again, this time by nearly 10,000 individuals. Other enrollment trends include: 

• Enrollment in Health Savings Account or Health Reimbursement Account (HSA/HRA) qualifying plans rose to 455,741 people or 11 percent of overall enrollment.
• HMO enrollment dropped nearly 3 percent.
• Enrollment in self funded plans grew 3 percent.
• Enrollment in Minnesota Health Care Programs (Prepaid Medical Assistance, General Assistance and MinnesotaCare, Minnesota Disability Health Options, Minnesota Senior Health Options and Minnesota Senior Care) sponsored by MCHP members grew slightly to 415,463 or 10 percent of overall enrollment.