Filed Under:Health Insurance, Ltci

LTCI Carrier Reports 2011 Results

MedAmerica earned lower average investment yields but increased operating profits. (AP Photo/Eduardo Verdugo)
MedAmerica earned lower average investment yields but increased operating profits. (AP Photo/Eduardo Verdugo)

The MedAmerica Companies, a group of companies that specializes in selling long-term care insurance (LTCI) and related chronic-care products, is reporting $2.8 million in net income for 2011 on $226 million in revenue, compared with $4.6 million in net income on $221 million in revenue for 2010.

MedAmerica, Pittsburgh, is a unit of the Lifetime Healthcare Companies Inc., Rochester, N.Y., the parents of Excellus Health Plan Inc. Excellus is a nonprofit company that runs Blue Cross and Blue Shield plans in New York state.

William Jones Jr., president of MedAmerica, notes in a letter introducing MedAmerica's 2011 annual report that the company's results reflect the performance of LTCI products.

"MedAmerica remains committed to the LTCI industry," Jones says in the letter. "We are stable. We are responsible. We are growing. And we are fully transparent."

The Federal Reserve Board has hurt investment earnings on the assets backing LTCI policies, long-term disability insurance policies, and other insurance products that depend in part on the performance of long-term bond portfolios by pushing interest rates on U.S. government bonds to unusually low levels over the past few years.

MedAmerica says the yield on its investment portfolio fell to 5.7% in 2011, from 6.4% in 2010.

The company collected a total of $4.9 million in realized investment gains from investments sold, written off or written down during 2011, down from $19 million in realized investment gains for 2010.

But interest and dividend income, net of investment expense, increased about 27% during the year, to $75 million.

Annualized premium revenue from new LTCI sales increased 14%, to $8 million.

Total premium revenue rose 2.2%, to about $147 million.

The number of agents who sold a MedAmerica policy increased to 943 in 2011, from 526 in 2010.

"The company continues to expand its sales capacity by contracting other forms of distribution, including financial planners and group brokers," MedAmerica says in an analysis of its results.

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