BCBS of North Carolina posts slight profit in 2015
Although its losses in the individual market grew, Blue Cross and Blue Shield of North Carolina (BCBSNC) rebounded from a multimillion-dollar loss in 2014 by posting a small profit in 2015, the insurer announced.
BCBSNC's mounting losses tied to the Affordable Care Act exchanges have made headlines recently amid similar struggles faced by some of the country's largest insurers. BCBSNC even said it might leave the ACA marketplace in 2017.
The insurer is also grappling with serious IT issues that led its customers to experience significant overbilling and dropped coverage, a situation that has led state officials to investigate.
But despite its struggles, BCBSNC ended 2015 with a net income of $0.5 million, it said in its earnings report out Friday, an improvement from the $50.6 million loss it posted in 2014.
"The environment remains volatile, and medical claims and expenses continue to increase. ACA plan losses grew this year and led to overall operational losses," Gerald Petkau, the company's senior vice president and chief financial officer, said in the earnings statement. "However, the losses were offset by improvement in other lines of business and investment income."
Individuals insured through the ACA comprise 36 percent of BCBSNC's fully insured membership, and this group's members proved to be high users of care--particularly in terms of orthopedics procedures, emergency department care and specialty drugs, the insurer said. Given those trends, BCBSNC's individual market business lost $282 million in 2015.
BCBSNC President and CEO Brad Wilson's total compensation rose 34.4 percent compared to 2014, the Winston-Salem Journal reports, with the company's top six executives receiving more than $1 million in total compensation.
Yet while one critic questioned the executives' salaries, a spokesman for the insurer tells the newspaper that "less than one-tenth of a cent of premium dollar goes to executive compensation."
The earnings of Blues insurers across the country are expected to decline for 2015, according to a recent report from Fitch Ratings, mainly due to losses on the ACA exchanges. Many Blues plans also have trouble generating adequate capital while maintaining nonprofit status, the report said.
Blue Cross and Blue Shield of North Carolina projects major ACA exchange losses
Fitch expects BCBS companies' 2015 earnings to fall
No end in sight for BCBS of North Carolina technology woes
BCBS of North Carolina might exit ACA marketplace