Tufts Health Plan net income down sharply

WATERTOWN, Mass. – Tufts Health Plan’s net income for the first nine months of this year has been half what it was for the same period last year, financial figures released Friday show: $46.2 million versus $92.9 million, even as its total revenue grew from $1.6 billion to $1.8 billion.
The nonprofit health plan, which is re-entering the Rhode Island market as of Jan. 1 after nearly a decade’s absence, reported drops in both operating and investment income.
Operating income was $31 million, down by a third from $45.1 million in the first nine months of 2007, the company said. Investment income was down far more sharply, to $19.9 million from $48.8 million last year, making Tufts the latest in a string of companies in health care and other sectors to see its bottom line affected by the Wall Street crisis.
For the first nine months of the year, Tufts said it paid income taxes of $4.6 million, up from $1.1 million in the same period last year.
For the third quarter of 2008, Tufts reported net income of $17.3 million, investment income of $2.5 million net of impairment charges, operating income of $17.6 million, and income taxes of $2.8 million, with $630 million in revenue.
The plan said its total net worth as of Sept. 30 was $ 618 million, with no debt, down from $628.8 million, with no debt, on Sept. 30, 2007. Total membership grew by nearly 7 percent in that time period to 698,039.
In a news release, Umesh Kurpad, senior vice president and chief financial officer, said the health plan is performing “in line with our 2008 expectations.”
“We are being well served by our fiscal discipline, which is evident in the management of administrative costs and appropriate medical management,” he said. “Moreover, we continue to attract new members while maintaining our pricing discipline – and that is the ultimate measurement of our success. In regards to our investment income, we are paying close attention to the marketplace, as is everyone. However, in our overall 2008 plan, there are no surprises. Our net income is below 2007, which reflects a more competitive environment.”
Looking ahead, Tufts cited its entry into the Rhode Island market, which it expects to add to its “organic” membership growth in existing markets. The company also noted that it was just named No. 2 in the country among commercial health plans in the U.S. News & World Report listing of “America’s Best Health Plans.”
Tufts Health Plan is a nonprofit health-maintenance organization (HMO) with about 680,000 members. For more information, go to www.tufts-healthplan.com.