January 30, 2023
According to Mark Farrah Associates’ (MFAs) Health Coverage Portal™, as of September 30, 2022, Blue Cross Blue Shield (BCBS or Blues) membership comprised 38% of total U.S. health insurance (Individual plus Employer-based, for all funding types, Medicaid and Medicare) enrollment, or nearly 119 million members. BCBS plans with over $17 billion in revenue through the third quarter of 2022 (3Q22) include: Elevance Health (formerly Anthem), Health Care Service Corp. (HCSC), Independence Blue Cross, Blue Shield of CA, and Guidewell Mutual Holding Group. BCBS plans have been health insurance leaders for decades across the U.S. with diversified product portfolios, including commercial, Medicare and Medicaid business, along with specialty benefits.
In this brief, Mark Farrah Associates (MFA) assesses profit margins of the top BCBS plans, comparing year-over-year performance from September 2019 to September 2022, based on the National Association of Insurance Commissioners (NAIC) and the California Department of Managed Health Care (CA DMHC) statutory reporting. Total profit margins for Blues plans (net income divided by total revenues) increased from 5.8% as of 3Q19 to 6.1% in 3Q20. However, the total profit margin fell to 3.9% through 3Q21, and has continued to decline to 3% for 3Q22.
While Blues plans remain financially strong and continue to gain new members, year-over-year, overall profitability was down through 3Q22. Of the leading Blues plans, only Guidewell and Elevance Health reported improved profit margins. Delving deeper into administrative and medical cost trends, data that is available in MFA’s Health Coverage Portal show increased spending on hospital and medical expense and administrative expenses are driving the declines in profitability for the Blues. Full annual results will not be available until spring. As always, Mark Farrah Associates will report on important BCBS plan performance and provide valuable health insurance insights in its future briefs.
About Mark Farrah Associates (MFA)
Mark Farrah Associates (MFA) is a leading data aggregator and publisher providing health plan market data and analysis tools for the healthcare industry. Our product portfolio includes Health Coverage Portal™, County Health Coverage™, Medicare Business Online™, Medicare Benefits Analyzer™, 5500 Employer Health PLUS, and Health Plans USA™. For more information about these products, refer to the informational videos and brochures, available under the Our Products section of the website (www.markfarrah.com) or call 724-338-4100.
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