University Health
Alliance earns $1.7MThe insurer predicts it may soon
be free of state supervision
Health insurer University Health Alliance finished the first quarter with a net income of $1.7 million and is predicting it may emerge from state Insurance Division supervision by the end of the year.
UHA said it collected $13.6 million in premiums from its members and paid out $10 million in claims, Chief Operating Officer Howard Lee said.
It also collected about $20,000 in investment income for the quarter, Lee said.
Lee said the financial turnaround for the company began in the third quarter of 2001 and by 2002 showed a full-year profit of $1.4 million, Lee said.
With the loss of some of its membership last year, UHA was also able to move some money from its reserves. UHA reserves currently stand at $3.3 million. To meet state requirements, reserves should be at about $4.2 million, Lee said.
Lee said UHA improved its financial performance in several ways.
"Basically we reduced our administrative expenses, got our medical costs down and increased premiums. We now also have a much better book of business," he said.
UHA applied for and was granted a 10 percent premium rate increase by the state Insurance Division. The increase went into effect Jan. 1.
Lee said he is optimistic about UHA's future given its steadily improving performance.
"If we continue like this we may be able to get out of rehab by the end of the year," he said.
UHA's financial problems stem back to 2000 when it reported it was $1.23 million below the minimum reserve required by law and was forced to enter into a supervisory arrangement with the Insurance Division. Since June 2001, a court-appointed rehabilitator has been overseeing operations and the division has been looking for potential investors.