Blue Cross Blue Shield of Michigan made $122 million in 2016 across all of its businesses, although the state’s largest health insurer again lost money on health insurance policies.
Earnings from investments and for-profit subsidiaries drove earnings last year. The 2016 net income on revenues of $25.9 billion across all lines of business compares to a net loss of $68 million in 2015 on revenues of $24.2 billion.
Blue Cross Blue Shield made $335 million in 2016 on its investments and recorded strong results for its for-profit companies. The subsidiaries include the Lansing-based workers’ compensation carrier Accident Fund Group, which earned $144 million. Blue Cross Blue Shield also paid $400 million in taxes.
“As a nonprofit mutual, we always seek to maximize gains from investments and subsidiaries. Our ability to generate positive income in these areas protects our health insurance customers,” said President and CEO Dan Loepp.
Paul Mozak, Blue Cross Blue Shield’s vice president for finance and chief risk officer, noted that the “modest” net income for 2016 represented a margin of than less than 1 percent of total revenues. The results fell within the company’s target range.
“We try to manage our core health business on a very narrow margin, and we succeeded in doing that on 2016,” Mozak said.
The insurer recorded a net loss of $180 million on its health insurance business in 2016. The Blues lost $278 million in 2015 on health insurance policies.
Blue Cross Blue Shield lost money as well on individual health policies sold on the public exchange under the federal Affordable Care Act. The 2016 loss totaled $68 million, which is less than what many large insurance carriers have experienced in the individual ACA market.
Losses on Medigap supplemental policies, which at the end of 2016 are no longer subsidized, totaled $242 million.
In announcing the 2016 financial results, Blue Cross Blue Shield reported solid enrollment growth for the year. The insurer ended 2016 with 4.61 million members across all product lines, up 88,000 from a year earlier.
Membership nationally that includes people who work and live in other states grew by 100,000 to 5.34 million.
“Blue Cross Blue Shield continues to see a very strong response from our customers to our efforts to provide a broad array of health insurance products in the market,” said Andy Hetzel, vice president of corporate communications.
For the first time ever, Blue Cross Blue Shield exceeded 3 million family contracts.