Minnesota's nonprofit health insurers posted about $220 million in operating income last year, a figure that the carriers' trade group said is down from 2018 but still shows financial stability with the likely onset of COVID-19 medical bills.

In a release this week, the Minnesota Council of Health Plans said income of $219.8 million came on revenue of $15.8 billion, meaning the insurers collectively saw a margin of 1.4%.

The figures don't cover all of the products sold by the carriers, but are focused solely on state-regulated health plans that last year covered roughly 2.4 million Minnesotans.

"Stability is important because it gives health plans the ability to maintain medical reserve funds, which they use to operate during large-scale emergencies and for other expenses," the Minnesota Council of Health Plans said in a statement. "These funds will be especially important this year, as they will help plans support enrollees through the COVID-19 pandemic."

Nonprofit health insurers are allowed to generate income from operations, much like investor-owned companies generate operating profits. The difference comes in what happens to earnings, since for-profit companies can distribute income to shareholders where nonprofit groups retain earnings for operations.

On Thursday, Gov. Tim Walz announced an agreement with the nonprofit health plans that will waive out-of-pocket treatment costs for some COVID-19 patients. The announcement came weeks after state regulators urged the plans to cover the costs of medical care related to COVID-19, especially because a hospital stay can leave a patient with a cost-sharing bill of more than $1,000.

The agreement doesn't cover all employer health plans, however, and there are potential wrinkles depending on whether patients receive care at in-network hospitals.

The financial results released this week by the Minnesota Council of Health Plans cover seven health insurers: Blue Cross and Blue Shield of Minnesota; HealthPartners; Hennepin Health; Medica; PreferredOne; Sanford Health Plan of Minnesota; and UCare.

The numbers cover the roughly 2.4 million Minnesotans enrolled in "fully-insured" health plans that are regulated by state government. They don't include "self-insured" health plans operated by large multistate employers that hire the insurers as administrators.

Operating income figures do not include income from the health insurers' investments. In annual filings this week with regulators, several insurers have noted those investment holdings have seen significant fluctuations as the stock market has plunged with the spread of the novel coronavirus.

In 2018, the health plans collectively posted operating income of about $448 million on $15.7 billion of revenue, for a margin of 2.9%. Put another way, the health insurers in 2018 made nearly 3 cents of income for every dollar of revenue, vs. 1.4 cents of income for every dollar of revenue last year.

The release shows that insurers spent $1.6 billion, or roughly 10% of revenue, on administrative expenses — roughly comparable with 2018. The health plans had an average of 3.11 months' worth of expenses in financial reserve.

Like health insurers across the country, nonprofit carriers in Minnesota have eliminated cost-sharing for COVID-19 tests and expanded coverage for "virtual visits," where doctors and patients communicate via telemedicine systems rather than face-to-face. The nonprofit carriers also are participating in a special enrollment period at MNsure, the state's health insurance exchange, that's giving uninsured individuals a chance to obtain coverage.

"We recognize the significant public health threat that COVID-19 poses, and our health plans are committed to working with state and federal regulators so that enrollees have access to needed testing and treatments as quickly as possible," said Lucas Nesse, the chief executive of the Minnesota Council of Health Plans, in a statement.

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck