Published in Health Care
Blue Cross Blue Shield’s 2020 revenue takes a hit during COVID-19 pandemic COURTESY PHOTO

Blue Cross Blue Shield’s 2020 revenue takes a hit during COVID-19 pandemic

BY Monday, March 01, 2021 03:49pm

DETROIT — Costs associated with responding to the COVID-19 pandemic cut deeply into Blue Cross Blue Shield of Michigan’s bottom line for 2020, the company reported Monday.

Detroit-based Blue Cross Blue Shield of Michigan recorded a $120 million operating gain for 2020 on total revenues of $30.1 billion across all lines of business that includes health insurance and Lansing-based worker’s compensation provider Accident Fund Insurance Co.

The 2020 results are in line with annual operating margins over the past decade that averaged less than 1 percent, but are less than half of an operating gain of $248 million in 2019 on $30.2 billion in total revenues.

In its core health insurance market in Michigan, Blue Cross Blue Shield recorded net income of $315.4 million on $9.3 billion in total revenues, according to a filing with state regulators. The results include an $87.7 million gain on underwriting health policies and a net $189.6 million investment gain. The year compares to $905.3 million in net income for 2019 for the health insurance business in Michigan on total revenues of $9.2 billion.

“Like all businesses, the Blue Cross Blue Shield of Michigan enterprise was confronted with unprecedented volatility and disruption in 2020. We were able to weather that disruption and uncertainty in part by keeping our health business focused squarely on supporting the needs of our members, our group customers, provider partners and communities,” Paul Mozak, Blue Cross Blue Shield of Michigan’s senior vice president for finance and chief risk officer, said today during a media briefing on 2020 results.

“Our bottom line financial results for the last year in 2020 were obviously impacted by the significant amounts Blue Cross put behind the response to the COVID-19 pandemic,” Mozak said.

Blue Cross Blue Shield put $1.3 billion toward the pandemic response in 2020 that includes more than $115 million in medical, dental and vision policy premium rebates from lower medical claims as care providers were unable to perform elective procedures last spring. The company waived $74 million in member cost-sharing for COVID-19 tests and treatments and $65 million in telemedicine copays for members. Blue Cross Blue Shield made $680 million in advanced payments to health systems and $5 million to help physicians adopt telehealth platforms.

The company also paid $465 million in medical pharmacy claims for 164,000 members who became ill with COVID-19 last year, Mozak said.

An outstanding investment gain of $724 million offset some of that cost, Mozak added. The investment income “significantly lessened the pressure on Blue Cross’s health insurance lines,” he said.

While medical utilization rates have largely returned to normal since the spring, further premium rebates are possible in 2021 for individual policyholders, Mozak said.

“There is a small rebate that could go out in 2021,” he said.

Blue Cross Blue Shield of Michigan’s members declined by more than 41,400 to 5.34 million people, “primarily due to losses experienced and related to COVID-19 and its significant impact on the economy in Michigan, as well as the United States,” Mozak said.

Read 7631 times