As 2025 earnings reports trickled out over the last several months, they showed that many Blue Cross Blue Shield companies struggled financially last year as medical and pharmacy spending climbed and squeezed profitability. Class members began receiving payouts in May in the long-running $2.67 billion antitrust settlement, and a handful of top executives also shared their perspectives with Becker’s on the structural pressures facing the industry.
Five notable Blue Cross Blue Shield updates:
1. Financial
Blue Cross Blue Shield plans reported mixed 2025 financial results as rising medical and pharmacy costs pressured margins, with many plans posting operating or underwriting losses as investment income helped some remain profitable.
2. Insights shared with Becker’s:
BCBS North Carolina CEO Tunde Sotunde, MD, spoke about the broader structural problems facing the healthcare system and argued that nonprofit plans are better positioned to prioritize long-term community investment over shareholder returns.
Independence Health Group CEO Kelly Munson discussed how Medicaid work requirements and more frequent eligibility checks could increase coverage losses due to administrative hurdles. She also shared how alternative coverage models, including ICHRAs and balanced funding, can be used to expand access.
Elevance Health commercial benefits president Morgan Kendrick said employers are increasingly turning to alternative funding arrangements such as balanced funding, self-funded plans and multiple employer welfare arrangements to address rising costs.
Highmark BCBS shared how fabricated medical records generated by AI pose a growing fraud risk and anti-fraud teams must now scrutinize documentation more closely for signs of AI manipulation.
Blue Shield of California discussed the latest with its Virtual Blue program, now three years old and serving more than 150,000 members. The program has delivered 7%-10% lower overall care costs and reduced ED visits, though the company says the virtual-first model isn’t meant to replace in-person care for every member.
Blue Shield of California spinoff Stellarus launched its AtlasIQ solution in June, sharing how it aims to help regional and nonprofit insurers close the technology gap with national carriers.
3. Litigation
Blue Cross Blue Shield‘s $2.67 billion antitrust settlement began paying class members in May, resolving claims that BCBS plans conspired to divide markets between 2008 and 2020 while also requiring structural changes intended to increase competition among Blues plans. Separate antitrust litigation continues, including a $2.8 billion provider settlement and similar new lawsuits filed this year.
CareFirst BCBS filed a federal racketeering lawsuit in June alleging two Maryland insurance brokers orchestrated a yearslong scheme that fraudulently enrolled overseas clients in plans intended for Maryland residents, costing the insurer more than $51 million.
BCBS Louisiana lost its appeal in June that challenged how CMS calculated its 2025 Medicare Advantage star rating.
Anthem Blue Cross’s lawsuit accusing HaloMD and affiliated providers of gaming the No Surprises Act arbitration process was dismissed by a California federal judge in April, who ruled judicial review of IDR determinations doesn’t extend to routine challenges. The company said it would appeal the decision.
BCBS Texas is appealing a federal court decision dismissing its lawsuit against IDR company HaloMD, which alleged the firm exploited the No Surprises arbitration process by submitting ineligible claims
4. Product changes
CareFirst BCBS partnered with benefits platform Thatch in April to build an ICHRA model for brokers and employers across Washington, D.C., Maryland and Northern Virginia.
Horizon BCBS of New Jersey is entering the third-party administrator market through HealthEZ, a Minnesota-based TPA the insurer purchased last year.
BCBS Massachusetts will discontinue all PPO and EPO plans in the merged market (the combined individual and small group markets in Massachusetts) after 2026.
BCBS Vermont withdrew its proposed “Vermont Basic” plan for the 2027 exchange after regulators delayed a decision beyond the insurer’s implementation timeline, but still plans to offer the lower-cost product to self- and level-funded employers in 2027. The insurer said it intends to seek approval to launch the plan on the individual market in 2028.
Capital Blue Cross partnered with Bethlehem, Pa.-St. Luke’s University Health Network to launch Valley Advantage EPO, a value-based health plan now available to employers with over 100 employees in Lehigh and Northampton counties, with smaller businesses gaining access in 2027.
5. Pharmacy
Capital Blue Cross expanded its partnership with Mark Cuban Cost Plus Drug Co. to cover Humira and Stelara biosimilars starting in May, continuing a collaboration the insurer first established as Cost Plus Drugs’ initial payer partner in late 2022.
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