In 2022, several Blue Cross Blue Shield (BCBS) companies experienced thinner margins than in previous years due to increased medical utilization and costs as the COVID-19 pandemic waned. While some BCBS companies, such as Health Care Service Corporation, reported a net income of nearly $1.5 billion, others, such as Blue Cross Blue Shield of Michigan, reported a loss of $777 million. The financial performance of BCBS companies in 2022 is a reminder of the challenges facing the healthcare industry, and pressure to contain costs will continue in the years to come.
The COVID-19 pandemic had a significant impact on the financial performance of several Blue Cross Blue Shield (BCBS) companies in 2022. As the pandemic waned, medical utilization and costs increased, leading to thinner margins for many BCBS companies.
Here’s a look at how 8 BCBS companies fared in 2022:
- Health Care Service Corporation, the parent company of BCBS Illinois, Texas, New Mexico, Oklahoma, and Montana, posted a net income of nearly $1.5 billion in 2022.
- Blue Shield of California lost $910 million in 2022 as medical costs rose.
- Independence Blue Cross posted $156 million in net income in 2022. The payer’s operating margins declined in 2022, driven by increased utilization as more members received routine care as the pandemic waned.
- Blue Cross and Blue Shield of Minnesota posted an operating income of $187 million in 2022, bringing in $14.1 billion in revenue during the year.
- The four Blue Cross Blue Shield affiliates owned by Regence (Oregon, Washington, Idaho, and Utah) collectively reported more than $268 million in net income for 2022.
- Blue Cross and Blue Shield of North Carolina reported a net income of $36 million in 2022, for a thin net operating margin of .33 percent.
- Excellus BlueCross BlueShield posted $58.9 million in profits in 2022, a 50 percent decline in net income from 2021.
- Blue Cross Blue Shield of Michigan reported a $777 million loss for 2022, driven in part by the ongoing cost of the COVID-19 pandemic and pricing pressures in Medicare Advantage.
The financial performance of BCBS companies in 2022 is a reminder of the challenges facing the healthcare industry. The COVID-19 pandemic has had a significant impact on the cost of healthcare, and it’s unclear when costs will return to pre-pandemic levels. In addition, the aging population and the increasing prevalence of chronic diseases are putting upward pressure on healthcare costs.
As a result of these challenges, BCBS companies are facing increasing pressure to contain costs. This pressure is likely to continue in the years to come, and it will be important for BCBS companies to find innovative ways to control costs while still providing high-quality care to their members.