Commentary

New info: Blue Cross turned a $185 million profit in 2016, minimized ACA losses by 86%

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.

2 Comments


  1. Frances B. Price

    March 5, 2017 at 2:49 am

    I need to find cheaper insurance for my 23 year old daughter! PLEASE help me!!

  2. Mary Fuller

    March 11, 2017 at 5:48 am

    Isn’t BCBS still given tax exempt status for covering the state employees? That would certainly add to the bottom line AND explain why two competing companies had to pull out of the NC marketplace. BCBS has only one other competitor in NC which drives up rates, and keeps it out of the hands of working families that don’t qualify for subsidies. It’s important to realize that a marketplace monopoly doesn’t necessarily mean the ACA is doing well in NC. It simply indicates the need for all insurance companies to be able to fairly compete in NC for the benefit of all its citizens, not just state employees.

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