Insurers See 25% Rise in Profits in 2001

Profits at the nation’s health insurers jumped 25% in 2001, led by Blue Cross plans, though earnings from traditional HMO plans slumped.

All Blue Cross Blue Shield plans--led by Anthem Inc. and several nonprofits--reaped $2.9 billion in profit last year, a 70% increase from 2000, according to a survey by Weiss Rating, an independent firm.

Health insurers in the aggregate earned $4.1 billion in 2001, but earnings at health maintenance organization plans, which suffered from a consumer backlash against their restrictions, fell about 7%.

Blue Cross plans, which have their roots in nonprofit charitable groups, “are positioned to take advantage of the public’s dislike of HMOs” by offering alternatives, said Melissa Gannon, vice president of Weiss.