Mass. health insurers post losses
Increased use of benefits is among contributing factors
The state’s four health insurers posted net losses for the second quarter, citing continuing pressure from the economic downturn.
Among the factors contributing to the nonprofits’ performance were increasing medical expenses, higher claim costs associated with newly insured members, employers shifting to less profitable products, and people using more health services because they fear losing their jobs and company-paid insurance coverage.
Last year, all four insurers showed gains during the second quarter.
Because the state is a highly competitive insurance market, health plans typically operate on thin margins. But the recession has eroded their profitability, at least temporarily, according to financial reports filed with the state Department of Insurance.
“We’ve been seeing some signs of increased utilization of health care services that appears to be fueled by people anticipating losing their jobs or by people who have already been terminated but haven’t yet lost their health benefits,’’ said Jim DuCharme, chief financial officer at Harvard Pilgrim Health Care in Wellesley, the state’s second-largest health insurer.
DuCharme said it is too soon to say whether the trend will accelerate enough to throw off insurers’ budget projections for the rest of 2009.
Health plans say they expect their financial conditions to improve in the second half of the year when higher premiums - paid by employers to insurers - typically go into effect.
Boston-based Blue Cross and Blue Shield of Massachusetts, the state’s largest health plan, reported the biggest net loss: $33.6 million for the three months ending June 30. That included a $23.1 million loss for its health maintenance organization subsidiary. The insurer posted combined income of $30.8 million in last year’s second quarter.
Fallon Community Health Plan, based in Worcester, reported a net loss of $3.9 million for the April-to-June period, compared with net income of $1.2 million for the same quarter in 2008.
Harvard Pilgrim Health Care posted a loss of $2.3 million for the most recent quarter. It had net income of $600,000 last year.
Tufts Health Plan in Watertown had the narrowest deficit of the four insurers, reporting a second-quarter net loss of $204,000. A year ago, it posted quarterly income of $24.9 million.
Robert Weisman can be reached at weisman@globe.com. 
