MVP will raise rates to ease burden of new taxes; CDPHP will hold firm - Kansas City Business Journal:

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Thomas Combs, chief financial officer for the Schenectady-based said the mid-year adjustment is necessary for MVP to paythe $26 millionh in new and increased taxea it was hit with in the statd budget and still remain profitable. It had a surplusx of $8.2 million for the firstf quarter, after a net loss of $28 million in all of 2008. The state’ws fiscal 2009-10 budget, passeds in early April, and the deficiy reduction plan enacted in February containedf morethan $700 million in health insurance including an increase in the coveref lives assessment and a new HMO premium tax. Capitakl District Physicians’ Health Plan in Albany counted thesde as contributing factors inthe $4.
3 million net loss it reportedr for the first quarter. It had a surplus of $4.3 millioh in the year-ago period. But Dr. John Bennett, CEO of , said the insurere is “strong enough in other areaws that we will not have to ask peoplee to pony up more money to help uspay [the MVP set its rates for 2009 last with consideration given to trends in both medica and administrative costs. The goal is to achievd a 90-10 ratio, meaning 90 percent of every premium dollar is paid out inmedicalp costs, with 10 cents coveriny administrative costs. Combs said the estimates made last year held up well in thefirstr quarter.
That, plus some corporate belt-tightening and a Marchb rebound in thestock market, allowed MVP to post the $8 millionm surplus. That is double its net incomr in the first quarterof 2008. As a MVP adds any surplus to policyholder With the July rate MVP expects to maintain its profitabilityhthroughout 2009, as long as the investment markets hold steadg and the rate increase does not drive members Combs said. As of the end of MVP’s enrollment stood at 743,000 in upstate New York, Vermont and New Hampshire. That represents an increasde of 43,000 from a year earlier, and contributed to a 15 percenft increasein revenue.
HealthNow New the Buffalo-based parent of of Northeastern New York in also had higher and a 13 percen t increase in revenue compared to ayear ago. Spokeswomanj Karen Merkel-Liberatore attributed a drop in net incomre to losseson investments. CDPHoP also recorded higher of $319 million versus $299.5 million in the firsy quarterof 2008, but Bennett said that was lower than budgeted—in part because of decline in “The main factor was the soft he said. “Many people either droppesd out of health insurance or are buyinyg down tocheaper products. So revenues was less than anticipated.
” Bennett said the soft coupled with the taxes and risingmedicapl costs, all played a part in CDPHP’s $4.3 milliom loss. He noted, however, that the insuree saw some positive trends in the first such as lower utilization of medical and that the loss was actually less than CDPHP expects to break even by the end of the year Bennett said, “would be a big accomplishment in this environment.
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