Blue Cross Blue Shield 2022 Financial Results Mixed

As AMI monitors Blue Cross Blue Shield Plans during the year, a few 2022 financial results that have been filed show mixed results as the health insurers emerge from the pandemic.

Anthem operating revenue was $36.0 billion in the fourth quarter of 2021, an increase of $4.5 billion, or 14.2 percent, from the prior year quarter and 15.9 percent after adjusting for the repeal of the health insurance tax in 2021. Operating revenue for 2021 was $136.9 billion, representing 13.4 percent growth over 2020, and 15.0 percent growth after adjusting for the repeal of the health insurance tax in 2021. The increase for both the quarter and the full year was driven by higher premium revenue due to growth in Medicaid, Medicare and Commercial risk-based membership, and growth in pharmacy product revenue within IngenioRx, partially offset by the repeal of the health insurance tax.

Blue Cross Blue Shield of Michigan reported net income of $360 million for 2021 despite an operating loss of $374 million largely for its health insurance business due to the ongoing costs of the COVID-19 pandemic. The net income, about 1% of the insurer’s $32.5 billion in revenue, was a result of strong gains in its investment portfolio and profits from non-health lines of insurance business, officials said during the company’s annual financials briefing. In 2021, the company said it dedicated $860 million to customers and health care providers to pay for COVID-related expenses, including treatment and testing, without increasing health insurance premiums.

Highmark of Western and Northeastern New York lost $58 million last year – its first loss in six years – as the health insurer grappled with rising expenses from Covid-19. Highmark, which changed its name from HealthNow New York a year ago after completing its affiliation with Highmark Inc., reported a loss of about $58 million on revenue of $3.1 billion.

While Highmark’s revenue grew almost 5% to $3.1 billion in 2021 as it gained more members, its expenses grew much faster. The health plan reimbursed doctors, hospitals and other health care providers $2.79 billion last year, up 14% from 2020.  Between 2019 and 2020, by comparison, medical expenses went up only $42 million, or 1.7%. Despite the down year, Highmark remains on solid financial footing. The health plan’s state-mandated reserves total $637 million.

Regence BlueCross BlueShield of Oregon paid $2.17 billion in medical care for its fully insured members in 2021, or $4,639 per member, according to unaudited figures filed today with the Oregon Division of Financial Regulation.  Regence spent 87 cents of every premium dollar received from members for doctor visits, hospital care, medications, COVID-19 tests and treatment, and other health care goods and services for its members. Amidst the ongoing challenges of the pandemic, Regence continued to grow and ended 2021 serving more than 971,000 people, including self-funded and BlueCard® members. On total revenue of $2.49 billion, Regence had a net gain of 2.8 percent, equal to about 3 cents per premium dollar. For comparison, Regence’s annual net gain over the past 10 years has averaged 2.5 percent. 2021 performance was driven by positive investment returns, strong member retention and enrollment growth.

Takeaway: Blue Cross Blue Shield Plans should experience moderate increase of demand for care with the pandemic receding which should have a positive effect on profitability

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