BCBSNC sees first financial loss in 15 years
Blue Cross Blue Shield of North Carolina--the state's largest insurer--closed 2014 with a net loss of $50.6 million, the insurer announced last week. This is the insurer's first financial loss since 1999, reported the Associated Press.
Even though BCBSNC enrolled 257,704 members under the ACA--and experienced a membership jump from 3.84 million in 2013 to 3.91 in 2014--medical costs associated with ACA members, as well as poor performance in Medicare Advantage products, played key roles in the insurer's loss.
The insurer reported that claims and medical expenses increased to $6.4 billion, up 28.2 percent compared to 2013. Additionally, an average ACA individual member incurred medical costs of $435 per member per month, while non-ACA individual members racked up an averafe of $256 per member per month in 2014. ACA members currently make up 31 percent of BCBSNC's fully insured individual members.
"We are working in a volatile environment with high risk. While disappointing, this year's results are not surprising given the trends we observed throughout the year," Gerald Petkau, senior vice president and chief financial officer, said in the announcement. "Having adequate reserves means we are well-positioned to weather this difficult year. The company is strong, well capitalized and well positioned for the future."
Blue Cross plans to seek $120 million from the insurance pool created under the ACA to help insurers cover losses associated with taking on new, potentially at-risk members. Should the insurer be reimbursed this amount, the company's loss would be $10.6 million this year, reported News Observer.
BCBSNC's loss may have larger implications for other single-state Blues plans. It's possible Blues plans' long run of success could, in fact, limit the plans' ability to progress in the industry, FierceHealthPayer previously reported.
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