With medical costs rising slightly faster than premium income, CareFirst BlueCross BlueShield yesterday posted nearly flat results for the third quarter.

CareFirst had operating profit of $27.1 million in the three months ended Sept. 30, up 11.7 percent from the $24.3 million earned in last year's third quarter.

G. Mark Chaney, executive vice president and chief financial officer, said while the profit is higher in dollars, it's down slightly as a percentage of revenue. Increased membership - up 3 percent in the past year, to 3.2 million people - and savings in administrative costs accounted for the higher dollar figure, he said.

CareFirst is a nonprofit insurer - its application to convert to for-profit operation is being reviewed by regulators - but does report operating profits, the extent by which its revenue exceeds its expenses.

Revenue was $1.7 billion, up 10.2 percent from $1.5 billion in the year-earlier quarter. However, health care costs rose even faster. Care costs in the quarter were $1.5 billion, up 10.9 percent from $1.4 billion in the third quarter of 2001.

"Generally, we're not disappointed," Chaney said. He said CareFirst remains concerned about rapidly rising health care costs. He said the insurer would try to deal with that, in part, by "negotiating reasonable provider reimbursements," noting that Children's Hospital in the District of Columbia will be leaving the CareFirst network because it wanted higher rates than CareFirst was willing to pay.

Chaney said it was too early to say how much premiums might increase next year.