GRAND RAPIDS — Priority Health earned more than $137 million across all business segments in 2018, led by strong growth in the bottom line at its core HMO business.
A significantly higher gain on underwriting health policies pushed the Grand Rapids-based Priority Health’s HMO business to $123.8 million in net income for 2018, according an annual financial statement filed with state regulators. The result compared with $78.6 million in net income in 2017 for the HMO business, which is by far the Priority Health’s largest segment.
Priority generated total revenues of $3.18 billion for the HMO business, which recorded a $102.5 million net underwriting gain, an increase of 67 percent from the prior year, and $20.6 million in net investment income.
Priority Health’s 2018 financial performance “puts us very well positioned for continued strong growth so we can provide more people across the state excellent, affordable health care,” said CFO Mary Anne Jones.
“It was another great year,” Jones said.
The 2018 results also should enable Priority Health to continue another year of rate moderation.
Last fall, Priority Health lowered HMO rates for employers enrolled in the small group market by an average of 2.6 percent, and reduced rates by 0.8 percent for small businesses enrolled in PPO policies through Priority Health Insurance Co. Rates for individual health policies declined an average of 2.5 percent.
“Our goal is to continue to keep rates moderated,” Jones said.
Priority Health’s HMO enrollment dipped about 1.5 percent for the year to 514,158 as of Dec. 31 because of an approximate 40-percent drop in individual enrollees, from about 90,000 to about 54,000 members, according to the annual financial statement filed with the Michigan Department of Financial and Insurance Services.
Partially offsetting the individual market decline, Priority Health grew enrollment in group HMO policies grew by about 15,000 members to 295,526. Membership for Medicare Advantage increased as well last year by another 15,000 members to more than 145,000.
In other market segments, Priority Health’s PPO business recorded flat net income of $4.6 million for 2018. The Medicaid HMO Priority Choice earned $8.7 million, down from $12.7 million in net income for 2017.