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Press Release
Medica Reports 2017 Financial Results
June 19, 2018
MINNETONKA, Minn. — Medica's 2017 financial results have been filed with the Minnesota Department of Commerce. Performance improved substantially from 2016 to 2017. In 2017, the organization had an operating income of $147 million on $3.7 billion in revenue and an overall operating margin of 3.9 percent. In 2016, Medica lost $271 million on revenue of $4.5 billion for an operating margin of -6.0 percent.
"I am proud of the turnaround accomplished by the dedicated employees of Medica, as we were coming off the worst financial year in our company's history," said John Naylor, Medica president and chief executive officer. "2017 was a transition year for Medica as we needed to restructure the company after the significant losses experienced in our Medicaid business. Our employees rallied around the focus on our members and delivered results that proved to all of our stakeholders why we are the trusted health plan of choice."
Medica has been profitable every year but two since 2002 with an average margin of 1.3 percent. Following losses in 2016, Medica rebounded with its strongest financial performance in history in 2017. Meanwhile, net assets stand at about $1 billion, the highest level in company history, and provide the organization with the financial strength to meet the ever increasing health care needs of its members.
Strong Position
Medica's current business mix and success puts it in a strong competitive position.
On its individual line of business, Medica experienced a net operating loss of $5 million in 2017, which represented an improvement of $51 million when compared to 2016. The 2017 margin was -0.6 percent in stark contrast to -16.8 percent in 2016.
Medica continued to build on its successful commercial line of business in 2017 with net operating income of $28 million. This amounted to an increase of $23 million from 2016. The 2017 operating margin was 3.5 percent on a growing book of business, while the 2016 margin was 0.5 percent.
Losses were reversed in the Medicare business, with $34 million of operating income (up from a $12 million loss in 2016) for a margin of 4.2 percent. Medica's Medicare members value the service they receive — in member satisfaction surveys, on a ten-point scale, 93 percent of respondents rate their overall satisfaction as 8, 9 or 10.
In 2017, Medica reported operating income of approximately $48 million in the Medicaid business. Much of the financial success in Medicaid is due to strong performance in the MSHO and SNBC markets. Also, in 2016 Medica was required to establish a $55 million premium deficiency reserve that covered losses for the first four months of 2017, before the contract for the Medicaid Families and Children program expired.
Diversification
In 2017, Medica also made significant progress in diversifying its business base. As a result, Medica now has more than 250,000 members in six states beyond Minnesota.
Medica in the Community
Medica has developed deep roots in its home state of Minnesota. Since 2003, the Medica Foundation has provided nearly $27 million in grants to organizations that improve the health of Minnesotans and those in border communities. Strategic partnerships also have been developed between Medica and key organizations like the University of Minnesota and YouthLink. Most of Medica's employees are based in Minnesota and they have a long and generous history of giving. Medica employees since 2012 have donated nearly $2.3 million through the annual Employee Giving Campaign, supporting numerous organizations in the communities it serves. And since 2003, Medica employees have logged more than 30,000 hours of volunteer time with local non-profit organizations.
Medica also has good relationships with the providers in the communities it serves. Those relationships have allowed the organization to create competitive products that allow providers to focus on care delivery and Medica to focus on health plan administration.
About Medica
Medica is a health services company headquartered in Minneapolis and active in the Upper Midwest. The non-profit company provides health care coverage in the employer, individual, Medicaid and Medicare markets. It operates in Minnesota, Iowa, Kansas, Nebraska, North Dakota, South Dakota and Wisconsin. Medica also offers national network coverage to employers who have employees outside the Medica regional network.
Medica's vision is to be trusted in the community for our unwavering commitment to high-quality, affordable health care.
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Contact
Greg Bury
952-992-8437
[email protected]