The nation's highest rated health plan is going through some growing pains and trying to make it to 2015 intact.
Boston-based Tufts Health Plan, the National Committee for Quality Assurance's top rated insurer, has released third quarter financial results that show a mix of positive signs and headwinds.
In the nine months that ended September 30, Tufts Health Plan brought in revenues of $3.2 billion and earned a net income of $22 million, with investment income of $42 million and an operating loss of $20 million.
"Our results through September highlight an important increase in membership and revenue growth," said Umesh Kurpad, Tufts Health Plan chief financial officer, noting that the insurer has a total net worth of $1.1 billion and no debt.
Favorable membership and revenue growth "have provided some relief from costs incurred from the Hepatitis C drug Sovaldi, and those associated with the continued implementation of the Affordable Care Act and its related fees and taxes," he said.
Since the third quarter of 2013, Tufts Health Plan membership has grown to more than 1 million Massachusetts and Rhode Island residents, and revenue has grown by about $300 million, although operating income and losses have been off.
In the first three quarters of 2013, Tufts Health Plan posted a net income of $45 million, with $41.9 million in investment income and operating income of $3.3 million.
In the third quarter of 2014, the insurer reported a net income of $48.1 million, $13.9 million of it from investment income and $34.2 million from operations, with revenues of $1.1 billion.
Kurpad said the insurer is on track to break even for the year, with this quarter's results helping close in on a $54 million operating loss in the second quarter.
Many challenges loom, though, and not just for Tufts Health Plan but other Massachusetts insurers.
There is uncertainty over the state exchange, the Massachusetts Health Connector, and what plans some 450,000 individuals who were temporarily covered in Medicaid will select. Then there the long-term funding and policy uncertainty over Medicaid, or MassHealth, beneficiaries of which comprise 24 percent of Tufts Health Plans' membership.
The administration of outgoing Governor Deval Patrick recently reached an agreement for a five-year Medicaid waiver with the feds that totals $41 billion. But there is no guarantee that the new Governor, Republican Charlie Baker, the former CEO of Harvard Pilgrim credited with saving the company, won't make tweaks or spending reductions.