On March 1, Blue Cross and Blue Shield of North Carolina provided a year-end financial report for its health insurance business in 2016. What we learned is telling: after turning a small profit the prior year, Blue Cross produced a profit of $185 million in 2016.
Much has been made in the past of the financial losses that Blue Cross has incurred on plans sold on the individual/nongroup market, to which the Affordable Care Act made critical reforms that became effective in 2014.
However, Blue Cross’ financial losses on its ACA business shrunk by 86% from 2015 to 2016.
The lesson: It has taken a little time for insurers to adapt and learn how to manage the costs and utilization patterns in this new line of business. But that’s not out of the ordinary for businesses adjusting to changing markets.
Despite any losses it incurs through what it calls its ACA line of business, Blue Cross has held steady reserves of around $2 billion. The company is healthy, and even if it experiences slightly larger losses on these lines of business, it can sustain them without having its solvency threatened and without passing the buck to consumers.
While conservatives throw out alternative facts about the ACA going into collapse, it’s clear that—in only the third year of the ACA’s health insurance marketplace—companies are figuring this thing out. As Blue Cross minimizes their losses and more than half a million North Carolinians continue to enroll each year, it’s easy to see that there is no imminent collapse here in our state, even with limited insurer competition.