Blue Cross Blue Shield of Michigan Manages Stable Financial Performance in 2023, Despite Massive Increases in Health Care Costs

Helen Stojic

| 4 min read

The Detroit skyline from a bird's eye view at sunrise.
DETROIT, March 1, 2024 — Despite experiencing over $3 billion in increased medical and pharmacy claims costs in 2023, Blue Cross Blue Shield of Michigan will report a marginally positive net gain of $100 million on enterprise revenue of $36.3 billion for the calendar year ending Dec. 31. The company’s audited financial statements, prepared under Generally Accepted Accounting Principles (GAAP), will be included in its annual report that will be published in May.
“The health care economy, in Michigan and nationally, is experiencing an extreme wave of cost pressures brought on by surging utilization and skyrocketing demand for high-cost pharmaceuticals,” said BCBSM president and CEO Daniel J. Loepp. “Despite these extraordinary pressures, Blue Cross retained our membership, managed a positive financial margin, and continued our dedicated efforts to promote affordable health coverage for our members in 2023.”
BCBSM will report an underwriting loss of $544 million driven by the fast-growing cost and use of health care services. These losses were alleviated by strong performance from the company’s investment portfolio and by profits earned by the company’s subsidiaries – bringing the positive bottom line to $100 million, or 0.2 percent of revenue.This result is consistent with the company’s average annual operating margin over the past 10 years of less than one percent of revenue.
In 2023, BCBSM and its subsidiaries paid an average of $88 million per day for the care and benefits of members in Michigan and around the nation. This is $8 million more per day than 2022.The company experienced a $1.4 billion increase in claims costs for medical services, especially surgical, hospital-administered drugs, imaging, and diagnostic services. Additionally, the company experienced an increase of $1.8 billion in pharmacy claims costs, including $750 million more for specialty drugs, especially for autoimmune conditions; and $350 million more in claims for GLP-1 drugs for diabetes and weight management.
Offsetting the unfavorable health underwriting results was BCBSM’s conservatively invested portfolio of stocks and bonds, which generated a positive return of $757 million on a GAAP basis. In addition, net gains from BCBSM’s subsidiaries also added to the bottom line. BCBSM’s wholly owned specialty insurance subsidiary, AF Group, contributed $153 millionto enterprise results, including investment gains. As a nonprofit mutual insurer, BCBSM operates AF Group under its Emergent Holdings Division so that it is 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.
BCBSM’s total nationwide health insurance membership grew by about 19,000 members in 2023, bolstered by an increase in its Medicare Advantage line of business.
Total Health Insurance Membership – Total nationwide health insurance membership increased slightly to 5,204,264 at year-end 2023, an increase of about one-half of a percent (19,000 members).
Medicare Advantage Membership – Medicare Advantage membership grew in 2023 by 15,445 members, for a total of 635,094 across both group and individual plans.
ACA Individual Market Membership – BCBSM’s membership in individual plans remained steady, with a slight decrease of 3,564 members year-over-year, to a total of 153,936 members in January 2024 following the annual open enrollment period.
Medicaid Membership – After several years of growth, Blue Cross Complete of Michigan membership decreased in 2023 due to the end of the Public Health Emergency, losing around 21,000 members. BCC remains the third-largest Michigan Medicaid plan with 328,362 members.
Small Group Membership – BCBSM covers more members in Michigan small groups (under 50 employees) than any other health plan, providing benefits to 291,573 members in 2023, a decrease of 9,000 members.
BCBSM will further its ongoing commitment to the residents of Michigan by paying $100 million to the Michigan Health Endowment Fund in April 2024. This will bring BCBSM’s total payments to $910 million to enable the independent and nonprofit Michigan Health Endowment Fund to invest in programs protecting the state’s most vulnerable residents.
As a nonprofit mutual, BCBSM paid more than $150 million in taxes to federal, state, and local governments in 2023.
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 $471 million underwriting loss on SAP revenue of $11.2 billion in 2023. Under Statutory Accounting rules BCBSM’s Risk Based Capital was at 593%in 2023.
BlueCross BlueShield 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