Net income at health insurer Highmark fell 3.8 percent last year, from $462.5 million in 2010 to $444.7 million in 2011.
A $124 million tax benefit available to Blue Cross Blue Shield companies, like Highmark, under the 1986 Tax Reform Act contributed to the insurer's bottom line. Without the tax benefit, Highmark's profit would have declined 30.7 percent from 2010.
Total revenue was actually up a modest 1.2 percent, from $14.6 billion in 2010 to $14.8 billion in 2011. However, Highmark's expenses were also higher, while net investment income dropped. Highmark recorded net investment income of $148.1 million last year, almost a 39 percent decline from 2010. Overall, Highmark posted an operating margin of 3 percent.
Highmark CFO Nanette DeTurk said the health insurer is still very stable in its finances as it tries to "meet the requirements under healthcare reform and support our evolution from a traditional health insurance company to an integrated health and lifestyle company," according to the release.
Highmark is in the middle of several major moves and transitions. Last year, it awarded $100 million in grants to West Penn Allegheny Health System as part of its pending $475 million acquisition plan of the financially beleaguered, Pittsburgh-based health system.
This week, Highmark also fired Kenneth Melani, MD, as president and CEO after he was charged with assault and trespassing March 25. Police said Dr. Melani got into a fight with the husband of a woman with whom Dr. Melani was having an affair. The woman also worked at Highmark. Moody's Investors Service has since downgraded the outlook on Highmark's financial and debt ratings.
A $124 million tax benefit available to Blue Cross Blue Shield companies, like Highmark, under the 1986 Tax Reform Act contributed to the insurer's bottom line. Without the tax benefit, Highmark's profit would have declined 30.7 percent from 2010.
Total revenue was actually up a modest 1.2 percent, from $14.6 billion in 2010 to $14.8 billion in 2011. However, Highmark's expenses were also higher, while net investment income dropped. Highmark recorded net investment income of $148.1 million last year, almost a 39 percent decline from 2010. Overall, Highmark posted an operating margin of 3 percent.
Highmark CFO Nanette DeTurk said the health insurer is still very stable in its finances as it tries to "meet the requirements under healthcare reform and support our evolution from a traditional health insurance company to an integrated health and lifestyle company," according to the release.
Highmark is in the middle of several major moves and transitions. Last year, it awarded $100 million in grants to West Penn Allegheny Health System as part of its pending $475 million acquisition plan of the financially beleaguered, Pittsburgh-based health system.
This week, Highmark also fired Kenneth Melani, MD, as president and CEO after he was charged with assault and trespassing March 25. Police said Dr. Melani got into a fight with the husband of a woman with whom Dr. Melani was having an affair. The woman also worked at Highmark. Moody's Investors Service has since downgraded the outlook on Highmark's financial and debt ratings.
More Articles on Highmark:
Highmark Holding Closed-Door Meetings to Recruit Physicians for West Penn Allegheny
Moody's Downgrades Highmark's Outlook Following CEO's Firing
Public Hearing on Highmark Reorganization, West Penn Acquisition Planned for April 17