Blue Cross Blue Shield of Michigan Maintains a Strong Financial Position in Volatile and Uncertain Economic Times

Helen Stojic

| 5 min read

DETROIT, March 1, 2023 — Blue Cross Blue Shield of Michigan will report a net loss of 2.3 percent for 2022 on enterprise revenue of $32.8 billion. The net loss of $777 million is a result of several factors, including decline in investment portfolio values due to falling equity markets and rising interest rates, the ongoing cost of COVID-19, a one-time charge related to disposition of under-performing service entities and pricing pressures experienced in the Medicare Advantage market which led to lower revenue in that segment. The results, prepared under Generally Accepted Accounting Principles (GAAP) and currently under auditor review, will be published in the company’s annual report in May.
“We managed through tremendous volatility in 2022, driven by the lingering economic effects of the pandemic and uneasy financial markets,” said BCBSM president and CEO Daniel J. Loepp. “Despite these challenges, Blue Cross stood behind our members and maintained a strong and stable credit rating.”
Managing through economic headwinds, the company maintained its A (Excellent) rating with a “stable” outlook from AM Best, a nationally recognized ratings agency. This is the fifth consecutive year that BCBSM has received an “A” (Excellent) rating.
As a nonprofit mutual, BCBSM strives to manage its operating margin close to break even. Over the last 10 years, BCBSM has managed its operating margin to an average of less than one percent, including five years of negative margin and five of positive margin.
In addition to lower investment values, net income was affected by a one-time $314 million charge resulting from the pending sale of the company’s Advantasure health service company. The ongoing cost of COVID-19 also contributed to the lower net income. BCBSM dedicated $739 million in 2022 to customers and health care providers to pay for COVID services.
Losses were offset by gains in other areas of BCBSM’s portfolio. BCBSM’s wholly owned workers compensation and specialty insurance subsidiary, AF Group, contributed $64 million to enterprise results. As a nonprofit mutual insurer, BCBSM operates subsidiaries through its Emergent Holdings division that are purposed to support the company’s core health insurance lines of business through profitability in other insurance market sectors. Positive performance by BCBSM’s non-health lines of business allows the company to moderate pricing in health insurance, keeping health coverage more affordable. The Emergent Holdings portfolio includes workers’ compensation, specialty benefits as well as business process services provided to health care industry clients.
BCBSM and subsidiaries paid a cumulative average of $80 million per day into the health care economy in 2022 to support care and benefits for insured members.
Highlights of BCBSM’s membership performance in 2022 included growth in Medicaid and Medicare Advantage lines of business, and a marginal decline in overall national membership:
  • Health Insurance Membership – Total nationwide health insurance membership decreased slightly to 5,185,375 at year-end 2022 a decline of about two percent (96,000 members). This was primarily because of a challenging employment market that drove losses within national groups.
  • Medicare Advantage Membership – Medicare Advantage membership grew in 2022 by 15,992 members, for a total of 619,649 across both group and individual plans.
  • Medicaid membership – Blue Cross Complete of Michigan continued to grow, gaining more than 25,000 members in 2022. It remains the third-largest Michigan Medicaid plan with an all-time high of 349,274 members.
  • ACA Individual Market Membership – BCBSM’s membership in individual plans remained steady, with a slight increase of about 2,800 members, to a total of 157,500 members in January 2023 following the annual open enrollment period.
  • Small Group Membership –After growing in 2021, membership within small groups (under 50 employees) decreased by 11,000 members, reflecting a challenging job market and economy.
Since the onset of the COVID-19 pandemic in 2020, BCBSM has put more than $2.8 billion behind support for members, customers, and providers. During 2022, Blue Cross paid $739 million in COVID-19 response, including $25 million for administering the COVID-19 vaccine, $171 million for testing, and $543 million for treatment.
Despite posting negative net income for 2022, BCBSM will further its ongoing commitment to the residents of Michigan by paying $100 million to the Michigan Health Endowment Fund in April 2023. This will bring BCBSM’s total payments to $810 million to enable the independent and nonprofit Health Endowment Fund to invest in programs protecting Michigan’s most vulnerable residents.
“It’s with great pride that I can say Blue Cross Blue Shield of Michigan continues to fulfill our legacy as a trusted health insurance company and health care partner,” said BCBSM president and CEO Daniel J. Loepp. “Our work in 2022 reflects the tremendous dedication and passion of this organization. We have built a strong foundation that continues to supply us with the momentum needed to keep evolving for future stability and growth.”
As a nonprofit mutual, BCBSM paid $133 million in taxes to federal, state, and local governments in 2022.
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 a $443 million underwriting loss on SAP revenue of $10 billion in 2022. Under Statutory Accounting rules BCBSM’s Risk Based Capital was at 561% percent in 2022.
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
MI Blues Perspectives is sponsored by Blue Cross Blue Shield of Michigan, a nonprofit, independent licensee of the Blue Cross Blue Shield Association