Independence Health Group reports 2015 financial results
Topline revenue and membership grow despite industry challenges
PHILADELPHIA — Independence Health Group, Inc., (Independence) the parent company of Independence Blue Cross, LLC, reported another year of growth in topline revenue and membership for 2015. Independence finished the year with a record $13.8 billion in revenue, up $622 million or 4.7 percent over 2014. The company also saw an increase of nearly 400,000 members from the previous year, bringing membership to nearly 10 million people in 27 states and the District of Columbia, including 2.5 million people in the Philadelphia region.
In the health insurance industry, 2015 was a challenging year and the company incurred a net loss of $54.4 million. Factors contributing to this loss included a significant increase in use of health services among individual and Medicare members, as well as an increase in the amount spent on specialty and high cost brand name prescription drugs. In addition, Independence paid a total of $695 million in federal, state, and local nonpayroll taxes. For taxes and fees related to the Affordable Care Act alone, the company paid $263 million — nearly 30 percent above what was paid in 2014.
“During this time of unprecedented change in health care, we continued to execute and deliver on our multi-year growth and diversification strategy through the products we offer and the capabilities we provide,” said Independence Health Group president and chief executive officer Daniel J. Hilferty.
“In the last three years we expanded our national footprint, adding nearly three million members, increasing revenue 31 percent, and growing to serve people in 27 states and the District of Columbia,” Hilferty continued. ”We are a strong company, poised for continued growth throughout our region and the country, well positioned for the future, and prepared to face the challenges of our industry.”
“Our financial foundation continues to be strong with an average five-year margin of 1.2 percent and continued year-over-year growth for revenue and membership,” said Alan Krigstein, Independence Health Group executive vice president, chief financial officer, and treasurer. “However like many health insurance companies throughout the United States, we faced challenges that impacted our financial performance. For example, in 2015 our individual ACA members who enrolled during a Special Enrollment Period had claims more than 30 percent higher than consumers who enrolled during the standard Open Enrollment Period.”
In 2015, Independence’s growth and diversification strategy was guided by three key priorities:
- Comprehensive and diverse product portfolio. The hallmark of Independence continues to be high-quality, innovative products that serve all market segments at all price points — from individuals, seniors, and small businesses, to large local companies and national corporations employing thousands. In addition, Independence provides a full suite of Medicaid managed care products in various states.
- Critical investments in technology. The company invested in its infrastructure, making cybersecurity enhancements to keep its members’ information safe and expanding the use of data analytics to identify members at risk for serious illness and help them stay well.
- Consumer engagement and capabilities. Through its commitment to Human-Centered InnovationSM and keeping its members at the center of everything that Independence does, the company expanded and improved the consumer experience through new customer service technology, an enhanced member website, and increased access to the tools and resources available through IBX Wire, its mobile member engagement service.
In 2015, Independence employed more than 10,000 people throughout the United States, including 6,500 people in the greater Philadelphia region.
The company ended 2015 with $2.7 billion in surplus, which is in the “efficient” range, as defined by the Pennsylvania Insurance Department, and ensures that the company has the resources to pay claims and keep customers secure.
About Independence Health Group
Independence Health Group, together with its subsidiaries, serves nearly 10 million people in 27 states and the District of Columbia, including 2.5 million in southeastern Pennsylvania. In addition to a growing consumer business, Independence serves employer groups ranging from small businesses to national corporations. Headquartered in Philadelphia, Independence Health Group is a diversified company offering a wide range of services including commercial, Medicare and Medicaid medical coverage, third-party benefits administration, pharmacy benefits management, and workers’ compensation. Independence Health Group is an independent licensee of the Blue Cross and Blue Shield Association.
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Independence Blue Cross is the leading health insurance organization in southeastern Pennsylvania. more