Sentara Healthcare, which owns Optima Health Plan and 12 Virginia hospitals, including Martha Jefferson, reported big increases in revenues and earnings six months after opening a monopoly health insurance market in Central Virginia.
According to Sentara’s second-quarter financial report, the company earned $284.6 million in net operating income between Jan. 1 and June 30, a 74 percent increase over the same period in 2017.
Sentara attributed most of the increase to revenue from premiums on its health plans. Almost half of Sentara’s operating revenue so far this year, or $1.2 billion, comes from premiums and agreements with doctors and physicians, according to the report. By the same time last year, the company had made $735 million from such agreements.
Optima Health Plan is currently the only provider on the Affordable Care Act individual marketplace in parts of Virginia, including Albemarle, Greene and Orange counties and the city of Charlottesville. Premiums increased from the previous year by a state average of 81 percent, with an average monthly premium of $889.78. Optima’s Charlottesville-area marketplace premiums are among the highest in the country.
The company’s total operating revenue for the first half of 2018 was $3.1 billion.
While revenue from premiums and physician agreements rose 42 percent from the same period last year, the report shows that total operating expenses rose by just 16 percent, to $2.9 billion.
Sentara, a not-for-profit, reported an operating margin of 9 percent for the first half of the year, compared with 6 percent at the same time last year.
According to an analysis by Axios, an online news service, Sentara’s operating margin is the highest among 16 not-for-profit hospital systems across the country.
By comparison, the University of Virginia Medical Center had an operating margin of 4 percent in 2017. The Medical Center’s operating income last year was $87 million.
Sentara hospitals reported $258 million in net operating income in 2017, including $8 million from Martha Jefferson Hospital in Albemarle County. Optima Health Plans reported $11 million in net operating income last year.
Sentara’s supremacy in some areas — called a monopoly by the chairman of Virginia’s State Corporation Commission — will be challenged in 2019. Anthem HealthKeepers filed last week to add Central Virginia counties to its coverage area.
In a statement after Anthem filed to rejoin the area, Optima said: “In the face of significant uncertainty last year, Optima Health stood by the consumers needing individual plans in several markets, including Charlottesville, when Anthem chose to abandon them. Our decision to return to the Charlottesville area in 2018 gave more than 5,000 people who receive subsidies an affordable option when they otherwise would have had no access to insurance. That said, choice is good for consumers and we look forward to competing with Anthem again. We are still in the process of finalizing our individual rates for 2019 over the next couple of weeks.”