Blue Cross Blue Shield of Michigan to Post One Percent Net Income Margin After Dedicating $860 Million in 2021 to Help Members and Customers During COVID-19 Pandemic

Brianna Neace

| 4 min read

Blue Cross Blue Shield of Michigan building in Detroit.
DETROIT, March 1, 2022 — Blue Cross Blue Shield of Michigan will report a net income of $360 million for 2021 achieved through strong gains in the company’s investment portfolio and profits from its non-health lines of insurance business. The net income margin equates to one percent of BCBSM’s 2021 enterprise revenue of $32.5 billion, as calculated under Generally Accepted Accounting Principles. BCBSM will report an operating loss of $374 million for 2021 largely on its health insurance business, driven by the continuing cost of COVID-19. During 2021, BCBSM proactively decided to support members and maintain competitive pricing by absorbing costs arising from COVID-19 health services. In 2021, BCBSM dedicated $860 million to customers and health care providers in the form of paying for COVID treatment and testing, without factoring those costs into increases in health insurance premiums. This led to the negative underwriting results for the year. The operating loss was offset by careful management of the company’s investment portfolio and underwriting performance by its non-health insurance subsidiaries – resulting in the small positive net income of $360 million. Over the last 10 years, BCBSM has managed its operating margin to an average of less than one-half percent. “In 2021, Blue Cross put our financial strength behind our members and customers in a time of crisis, providing $860 million in pandemic-related benefits while shielding our members from direct impacts to their premiums,” said BCBSM President and CEO Daniel J. Loepp. “The strong performance of our subsidiaries and investments enabled us to support our members, while also managing a small positive margin to advance our business.” Offsetting the unfavorable health underwriting results was BCBSM’s conservatively invested portfolio of stocks and bonds, and subsidiary companies, which generated a positive return of $907 million. Positive performance by BCBSM’s non-health lines of business allows the company to moderate pricing in its health insurance lines of business, keeping health coverage more affordable. Blue Cross and its subsidiaries offer a diverse portfolio of products aimed to provide health care access and security. The portfolio includes commercial health insurance, workers’ compensation, dental, vision, Medicaid, and Medicare Advantage, as well as health care technology and business process services to health care industry clients. COVID RESPONSE Since the onset of the Covid-19 pandemic in 2020, BCBSM has put more than $2.1 billion behind support for members, customers, and providers. During 2021, Blue Cross devoted more than $860 million to its COVID-19 response:
  • More than $600 million for COVID-19 treatment costs
  • More than $185 million for COVID-19 testing costs
  • More than $75 million for COVID-19 vaccine administration costs
PAYING FOR CARE BCBSM and subsidiaries paid a cumulative average of $80 million per day into the health care economy in 2021 to support care and benefits for insured members. GROWTH IN MEDICAID AND MEDICARE Highlights of BCBSM’s 2021 membership performance include growth in Medicaid and Medicare Advantage lines of business, and a marginal decline in overall membership:
  • Health Insurance Membership – Total nationwide health insurance membership was 5,281,292 at year-end 2021, a slight decline of about one percent (64,000 members). This was primarily due to losses experienced related to COVID-19’s impact on the economy.
  • Medicare Advantage Membership – Medicare Advantage membership grew in 2021 by 12,308 members, for a total of 603,657 Medicare Advantage members.
  • Medicaid membership – Blue Cross Complete of Michigan continued to grow, gaining more than 34,000 members in 2021. It remains the third-largest Michigan Medicaid plan with an all-time high of 323,816 members.
  • ACA Individual Market Membership – BCBSM’s membership in individual plans remained steady, with a slight decrease of about 2,000 members, to a total of 168,064 members in January 2022 following the annual open enrollment period.
  • Small Group Membership –Blue Cross kept small group rates stable in 2021 to help small businesses that were heavily impacted by COVID-19. The small group year-end membership grew by about 7,000 members to 302,204 total members.
GIVING BACK TO MICHIGAN As part of its commitment to the residents of Michigan, BCBSM will pay $100 million to the Michigan Health Endowment Fund in April – bringing total payments to $710 million to enable the independent Health Endowment Fund to invest in programs protecting Michigan’s most vulnerable residents. TAXES As a nonprofit mutual, BCBSM paid $164 million in taxes to federal, state, and local governments in 2021. CREDIT RATING Ratings agency AM Best maintained BCBSM’s rating as “A Stable” in 2021. STATUTORY FILING INFORMATION BCBSM also will file a financial statement with the State of Michigan that is based on Statutory Accounting Principles (SAP). This accounting method is parent-company only and does not include subsidiaries. It also has other differences from GAAP accounting. It is required by state regulators but does not represent a comprehensive consolidated view of BCBSM’s enterprise financial performance as a nonprofit mutual. Under SAP accounting, BCBSM posted $162 million in underwriting loss on SAP revenue of $9.7 billion in 2021. Under Statutory Accounting rules, BCBSM’s Risk Based Capital decreased from 742 percent in 2020 to 686 percent in 2021. Blue Cross Blue Shield of Michigan, a nonprofit mutual insurance company, is an independent licensee of the Blue Cross and Blue Shield Association. For more company information, visit and Go to the 2021 Annual Report.

Leave a Comment

Your email address will not be published.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.


MI Blues Perspectives is sponsored by Blue Cross Blue Shield of Michigan, a nonprofit, independent licensee of the Blue Cross Blue Shield Association