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Why You Benefit from Blue Cross Blue Shield of Michigan’s Structure as a Nonprofit Mutual Insurer

With revenue of more than $30 billion, and positive operating margins at $120 million in 2020, how can Blue Cross Blue Shield of Michigan be considered a “nonprofit?” 

In fact, there are many community benefits of our corporate structure as a nonprofit mutual – and they far outweigh what a traditional “nonprofit” would deliver. 

  • We have no shareholders – meaning that health care dollars go back into health care, including the $71 million per day we paid in 2020 for our members’ care and benefits.
  • We give back to the community – including the $610 million we have paid to the Michigan Health Endowment Fund since 2013, which includes an $85 million payment that will be made this month.  
  • We aren’t primarily motivated by profit. In fact, we had positive operating margins just five times in the last 10 years. Our enterprise operating margin over the past 10 years has averaged under 1%. Throughout the COVID-19 pandemic, Blue Cross supported customers, members and providers with $1.3 billion in premium rebates, COVID-19 cost sharing, telehealth and advanced payments to health care providers. 
  • We pay taxes – in 2020, we paid $388 million in taxes to federal, state and local governments. 

That final point is a critical difference. Traditionally, private nonprofit organizations receive tax exemptions from local, state and federal governments in exchange for delivering a “community benefit” – for providing a service that can be considered part of the organization’s nonprofit charitable work. For example, like the care provided to the uninsured by many nonprofit hospital systems, these “community benefits” have a financial valuation that government agrees offsets the tax exemptions provided to the nonprofit. 

BCBSM is different. BCBSM pays taxes and provides a substantial community benefit through the Health Endowment Fund and other efforts. The contributions to the fund are in addition to the leadership and community investments we’ve made throughout the COVID-19 pandemic and the community-centered work we do to invest in solving the opioid crisis, promoting children’s health and being the largest source of private funding for Michigan’s free clinics. 

We believe in this model. It keeps us focused on the right priorities – our members’ care and the health of the communities where we all live and work. And it’s working, with enough profits to run our business but also return money, when possible, to our customers through efforts to moderate premiums for small employers, lower premiums for individual members and lower premiums for seniors.  

Our nonprofit approach to health care has been in place since our beginning – 82 years ago – and it’s working.  Its tangible benefits are felt every day in our members’ care and within the Michigan communities we call home. 

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