Blue Cross Blue Shield of Michigan reported a $3.2 billion increase in medical costs in 2023.
According to a March 1 news release from the Detroit-based insurer, BCBS Michigan had a net income of $100 million in 2023, 0.2% of the company's total revenue, up from a $777 million loss in 2022.
The company reported a $544 million underwriting loss driven by increasing medical costs. The loss was offset by income in investments and profits from the insurer's subsidiaries.
In a March 1 news release, the company described "massive increases" in medical costs. CEO Daniel Loepp said the company managed a positive margin despite "extraordinary pressures."
"The healthcare economy, in Michigan and nationally, is experiencing an extreme wave of cost pressures brought on by surging utilization and skyrocketing demand for high-cost pharmaceuticals," Mr. Loepp said.
Mr. Loepp saw a small pay cut in 2023. He was paid $15.7 million in 2023, down $1.2 million from 2022, the Detroit Free-Press reported March 1.
Here are five things to note about the insurer's finances in 2023:
- The insurer reported $36.3 billion in revenue in 2023, up 11% year-over-year from $32.8 billion in 2022.
- In 2023, the company paid out $8 million more in claims on average each day than in 2022.
- Costs for medical services increased $1.4 billion over 2022, according to BCBS Michigan. Pharmaceutical costs increased by $1.8 billion, including a $750 million increase in specialty drug costs and a $350 million increase in GLP-1 drug costs.
- The insurer's total membership was 5.2 million at the end of 2023, up slightly from 2022.
- Much of BCBS Michigan's membership growth was driven by Medicare Advantage, where it added over 15,000 members in 2023.
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