Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
South Country posts $21.1 million 2024 loss, urges rate fixes as ‘KARMA’ bill nears law
Summary
Scott Sheffman, CFO of South Country Health Alliance, told the Wabasha County Board that 2024 produced a $21.1 million net loss and an $11.4 million premium deficiency reserve; speakers said pending state legislation called "KARMA" could change the county-based purchasing model.
At the June 3 Wabasha County Board meeting, Scott Sheffman, chief financial officer of South Country Health Alliance, reported that the nonprofit plan recorded a $21,100,000 net loss for 2024 and established an $11,422,000 premium deficiency reserve related to contract year 2025.
The premium deficiency reserve (PDR) was booked in 2024 because actuaries project that capitation rates for 2025 are likely to be inadequate to cover expected claims. "We set up the PDR last year. So that basically made our 2025 budget a break even," Sheffman said, describing the accounting treatment that will release one-twelfth of the reserve each month in 2025 to offset expected losses.
The loss followed two years of record gains for the plan (net income in 2022 and 2023). Sheffman said South Country's loss ratio in 2024 was 96.9 percent, meaning about $0.97 of every premium dollar went to pay claims, leaving roughly 3 percent to cover administration and any margin. Administrative expenses were 8.9 percent of…
Already have an account? Log in
Subscribe to keep reading
Unlock the rest of this article — and every article on Citizen Portal.
- Unlimited articles
- AI-powered breakdowns of topics, speakers, decisions, and budgets
- Instant alerts when your location has a new meeting
- Follow topics and more locations
- 1,000 AI Insights / month, plus AI Chat
