Highmark Health Medicare Advantage membership grew 12% in 2023

Highmark Health’s Medicare Advantage membership grew 12.3% for the 2023 plan year, nearly twice the rate of most other carriers and one of the largest increases in the industry, the Pittsburgh-based nonprofit company announced Monday.

Policies co-branded with providers, tailored benefit offerings and high star ratings drove up enrollment 29,000 to 345,000, Highmark Health Plan President Tom Doran said during a call with investors Monday. Highmark Health Plan currently covers 7 million commercial, exchange, Medicaid and Medicare members in Delaware, New York, Pennsylvania and West Virginia.

Highmark offered a mix of zero-premium plans and “mid-priced” products that included supplemental benefits such as dental coverage in each of its markets, Doran said. The insurer also launched a new product catering to military veterans. Additionally, the Blue Cross and Blue Shield plans jointly marketed with with Newark, Delaware-based ChristianaCare and Dover, Delaware-based Bayhealth proved popular, he said.

Highmark’s insurance division buoyed the finances of the parent company’s Allegheny Health Network provider division, a 14-hospital system in western Pennsylvania and western New York. Higher staffing costs, inflation, investment losses and supply chain disruptions drove a net loss of $346 million on revenues of $26 billion in 2022.

The company provided more than $300 million in uncompensated care, charity care and corporate giving. It also spent more than $900 million on capital investments, such as Pennsylvania State University’s Health’s Lancaster Medical Center, which opened in October.

Labor costs were $92 million higher than anticipated, Highmark Health President and CEO David Holmberg said during the call. The company also recorded a $48 million loss in investment income in 2022 after earning $42.1 million in gains the prior year.

“We anticipate some of these challenges will continue into 2023,” Holmberg said. “We expect to experience lower margins and will be more purposeful with how we distribute resources.”

Highmark does not consider investment losses when devising insurance premiums, Holmberg said. “Investment income is part of our economic model that we look at over longer duration,” he said. “We are not trying to factor market ebbs and flows∏even pretty drastic changes over a reasonably short amount of time in our investment income—in our pricing formulas.”

Despite providers requesting reimbursement increases in the “high teens,” Highmark Health Plan expects to hike premiums in the “mid-to-high single digits,” Doran said. The insurer also plans to expand its exchange and commercial offerings to southeastern Pennsylvania next year.