Iasis Healthcare said Monday that it is pulling its managed-care coverage from Arizona's insurance marketplace exchange effective Dec. 31. During the third quarter, Iasis reported an $8 million loss on the business, mostly due to higher medical and pharmacy costs.
Iasis CEO Carl Whitmer said the company was following in the footsteps of many other insurers who were leaving the Affordable Care Act marketplaces due to their "instability," and "uncertainty and lack of funding of government premium stabilization programs."
The condition of new members and some existing groups caused Iasis's medical loss ratio to soar to 95.9% in the quarter compared with 87.9% in the prior-year quarter, excluding the Arizona exchange business.
The Franklin, Tenn.-based company, which operates both hospitals and managed-care plans, Monday reported a quarterly net operating loss of $34.6 million compared with an operating gain of $2.4 million in the same period of the prior year.
Both the hospital and managed-care divisions posted revenue growth.
Revenue in the quarter ended June 30 jumped 19% to $814 million from $686 million in the prior year quarter, the company said.
Iasis's managed-care business saw a 71% increase in covered lives that led revenue to jump 54% to $324.7 million.
A 2% quarterly increase in adjusted admissions pushed hospital revenue up 3% to $489 million compared with the year-earlier quarter.
