Blue Cross Blue Shield of Michigan experiences gains in membership; but flat financial results in 2015


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DETROIT, March 1, 2016 — Blue Cross Blue Shield of Michigan gained 44,485 new members in 2015, but will report a modest loss of $68 million on consolidated revenue of $24.2 billion when its audited GAAP financial report is released in May of this year. BCBSM has grown membership for five consecutive years. BCBSM and its HMO subsidiary, Blue Care Network of Michigan, had a combined Michigan-view membership of 4.53 million at year-end 2015. The plan membership nationally is at 5.24 million. Current year performance included charges related to the closing out of certain longstanding litigation, and losses attributable to the heavy subsidization of BCBSM’s Medigap supplemental product which will conclude in 2016. BCBSM will report a modest loss on its commercial lines of health insurance business. Favorable financial results included solid performance overall by BCBSM-owned subsidiary companies and $257 million in investment income. “We at Blue Cross are thrilled to remain the leading choice for health insurance among people who call Michigan home, and people elsewhere who work for Michigan companies,” said Daniel J. Loepp, president and CEO of BCBSM. “On the financial side, we work diligently as a nonprofit mutual to manage our performance to small margins. While we always seek reasonable positive margins, it’s not uncommon for events that happen during the course of the year to turn margins toward the negative. This is the story of 2015.” The company’s Risk Based Capital (RBC) ended the year at 574 percent. The year-over-year RBC decline was caused by strong growth in insured business, which increased capital requirements, and lower reserves. Because the final RBC reflects a financially strong company, it will trigger a payment of $60 million to the State of Michigan’s Health Endowment Fund. When this payment is made, BCBSM will have sent $210 million of a total $1.56 billion commitment to the Fund, enabling it to invest in protecting the state’s vulnerable and subsidizing Medigap coverage. “The speed of change in our industry has not slowed,” Loepp said. “Our focus is being ahead of the changes we know are coming. We continue to proactively prepare our company to compete and succeed in a market where costs need to be lower and capabilities to support growth markets need to be strengthened.” In 2015, for example, BCBSM concluded a joint venture agreement with Philadelphia-based AmeriHealth Caritas to serve an expanded population of Medicaid and Healthy Michigan Plan consumers in Michigan with Blue Cross Complete. BCBSM is a minority owner of AmeriHealth Caritas. Additionally, the company invested in acquiring Massachusetts-based ikaSystems, which will strengthen the company’s ability to deliver cloud-based solutions to health plans nationally, and partner with health plans on their Medicare offerings. Medicare is a growth market nationally, with more than 75 million Baby Boomers entering Medicare eligibility. Statutory Financial Reporting Information BCBSM also will file its financial statement with the State of Michigan. The state report is based on a different accounting standard – Statutory Accounting Principles (SAP), which does not include subsidiaries and some investments, and has other differences from GAAP. This standard is required by state regulators, but does not represent a comprehensive view of BCBSM’s enterprise financial performance as a nonprofit mutual. Under SAP accounting, the company posted a statutory net loss of $344 million on revenue of $7.5 billion in 2015. “Our company is financially strong, invested in successfully managing our customers’ costs, and is strengthening our local communities across Michigan,” Loepp said. “We are positioning ourselves to grow revenues by supporting emerging markets with leading capabilities and a willingness to partner. And we remain true to our longstanding mission of contributing back, as a nonprofit, to people and communities in Michigan.” Blue Cross Blue Shield of Michigan, a nonprofit mutual insurance company, is an independent licensee of the Blue Cross and Blue Shield Association. BCBSM provides and administers health benefits to more than 4.5 million members residing in Michigan in addition to employees of Michigan-headquartered companies who reside outside the state. 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